There Are Five Types of Risks Associated with Purchase Decisions

question 148

Multiple Choice

There are five types of risks associated with purchase decisions.Which of the following best describes a situation where your new car stalls in the middle of a busy intersection?

• A) physiological risk
• B) social risk
• C) financial risk
• D) functional risk
• E) psychological risk

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Definitions:

Bondholders

Individuals or institutions that hold the debt securities issued by corporations or governments, thus lending them money in exchange for periodic interest payments and the return of principal at maturity.

Stock Investment

The act of spending money to purchase shares in a company, aiming to earn dividends or sell the shares at a higher price for profit.

Strike Price

The price at which an optioned stock can be bought or sold. Also called the exercise price or striking price.

Intrinsic Value

The actual worth of an asset, determined through fundamental analysis without regard to its market value.