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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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