Which of the Following Would NOT Be Considered to Be

question 43

Multiple Choice

Which of the following would NOT be considered to be an example of open-ended credit?

• A) A gasoline credit card account
• B) A VISA account
• C) A real estate mortgage account
• D) A department store credit card account

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Definitions:

Risk Premium

The additional return an investor demands for taking on a higher risk compared to a risk-free asset, indicating the compensation for bearing extra risk.

Principle of Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize risks.

Efficient Market

A financial market theory stating prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Concentrating Investment

Allocating a significant portion of an investment portfolio to a single investment or a small group of investments, increasing potential risk and return.