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RISK PREMIUM: This has two very closely related uses. First, it's what risk averse people are willing to pay to avoid a risky situation. For example, if you would be equally happy with a guaranteed $900 or a 50-50 chance of getting either $500 or $1,500, then you're risk premium is $100. Second, it's the extra percentage points added to an interest rate to compensate for the risk of a loan. As a general rule, each 1 percent chance of default on a loan adds a risk premium of about 1 percent to the interest rate.
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Lesson 7: Market | Unit 1: The Exchange
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Page: 4 of 22
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Competition depends on the number of buyers and sellers.- More buyers creates more competition to acquire a good. Sellers don't have to sell a good below the going price with a lot of buyers willing and able to pay the market price.
Competition prevents buyers from forcing the price down to it's lowest level.- More sellers creates more competition to offer a good for sale. Buyers don't have to buy a good above the going price with a lot of sellers willing and able to sell at the market price.
Competition prevents sellers from forcing the price up to it's highest level.
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DISPOSABLE INCOME The total income that can be used by the household sector for either consumption expenditures or saving during a given period of time, usually one year. Disposable income (DI) is one of three measures of income reported in the National Income and Product Accounts maintained by the Bureau of Economic Analysis. The other two are national income (NI) and personal income (PI). Two related measures of production are gross domestic product (GDP) and net domestic product (NDP).
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center trying to buy either several magazines on fashion design or a package of 3 by 5 index cards, the ones without lines. Be on the lookout for small children selling products door-to-door.
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This isn't me! What am I?
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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"Nothing great has ever been achieved except by those who dared believe that something inside them was superior to circumstances. " -- Bruce Barton, Advertising executive
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TSE
Toronto Stock Exchange
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