Choose wisely. There is only one correct answer to each question.
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1.
An example of easy entry into a market would be _______.
A company signing up to become a seller on eBay. Signing up for eBay would be a good example of a new company easily entering the marketplace.
2.
A company that was once a major player in its market but is now suffering the effects of increased buyer power and a flight to other, related products would have a _______.
Narrow moat. It would have a narrow moat of the eroding variety.
3.
Regarding buying companies that have economic moats, which is probably the more profitable strategy?
Buying them, holding them for a long time, and then selling them. Given their advantages in their industries, you would likely come out ahead by holding them for a long time.
4.
When customers are fragmented and don't have much influence on a product, that is an example of weak _______.
Buyer power. For the companies producing the products, that is a positive thing, as it strengthens their competitive positioning.
5.
To find out whether a company you are investing in has a deep economic moat, you should look at _______.
How powerful any one competitive advantage is. This is what depth is about.
