The FTC Now Follows the "Modified" Ignorant Consumer Standard and Protects

question 9

True/False

The FTC now follows the "modified" ignorant consumer standard and protects only those cases of foolishness that are committed by significant numbers of people.

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Definitions:

PE Ratio

Price-to-Earnings Ratio; a valuation measure for a company comparing its current share price to its per-share earnings.

Yield %

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost or value.

Default Risk Premium

The additional yield that investors require to invest in bonds that have a risk of default, compared to risk-free bonds.

Liquidity Risk Premium

The extra yield or return that investors demand for holding a security that may not be easily sold or converted into cash without a significant loss in value.