A System Change That Results in an Improved Product or Service

question 5

Multiple Choice

A system change that results in an improved product or service and helps lower costs provided a(n)

• A) competitive advantage.
• B) improved business process.
• C) productivity gain.
• D) technological change.

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Definitions:

Maturity Risk Premium

The additional yield demanded by investors as compensation for the increased risk of holding a bond as it approaches its maturity date.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, the purchasing power of currency is falling.

Pure Rate

The interest rate exclusive of all other elements such as risk premium, inflation, or other costs often considered the real rate of interest with no adjustments.

Default Risk Premium

The additional yield that a borrower must offer to compensate lenders for the risk that the borrower may fail to make required payments.