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    Question

    Which pricing strategy charges higher interest for

    riskier borrowers?
    A Uniform pricing Correct Answer Incorrect Answer
    B Differential pricing Correct Answer Incorrect Answer
    C Skimming Correct Answer Incorrect Answer
    D Psychological pricing Correct Answer Incorrect Answer
    E Prestige pricing Correct Answer Incorrect Answer

    Solution

    Differential pricing varies price based on risk or segment characteristics. Why others are incorrect: Uniform charges same rate; Skimming high initial price; Psychological uses pricing tricks; Prestige signals exclusivity. Banking Example: Higher loan rates for low credit scores.

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