Examlex

Solved

Patrick Jones Is Interested in Purchasing a 65" LED TV

question 85

Multiple Choice

Patrick Jones is interested in purchasing a 65" LED TV for his living room.He knows that right now the TV will cost approximately $500.Patrick wants to borrow the money to purchase the TV but is concerned that interest rates are going to fall in the future.He is worried that he might get stuck with a loan at a high interest rate.What type of risk is Patrick worried about?


Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with fixed dividends.

Common Equity

The percentage of a corporation's equity held by investors in the form of common shares.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.

Free Cash Flow

This refers to the amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. It is an important indicator of financial health.

Related Questions