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Credit Cards Have Been the Main Payment Method Used for Online

question 49

Essay

Credit cards have been the main payment method used for online purchases, however the shortcomings of credit cards in the real world have become even more evident in cyberspace. Explain.


Definitions:

Portfolio Diversification

An investment strategy aimed at reducing risk by allocating investments across various financial instruments, industries, or other categories.

Risk Premium

The additional return demanded by investors for taking on the higher risk associated with an investment, compared to a risk-free asset.

Unsystematic Risk

The risk associated with a specific company or industry, also known as diversifiable risk or idiosyncratic risk.

Market Risk

The risk of losses in positions arising from movements in market prices.

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