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RISK PREMIUM: This has two very closely related uses. First, it's what risk averse people are willing to pay to avoid a risky situation. For example, if you would be equally happy with a guaranteed $900 or a 50-50 chance of getting either $500 or $1,500, then you're risk premium is $100. Second, it's the extra percentage points added to an interest rate to compensate for the risk of a loan. As a general rule, each 1 percent chance of default on a loan adds a risk premium of about 1 percent to the interest rate.
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LAW A generally accepted, verified, proven, fundamental scientific relation. A law is a scientifically certified, thoroughly verified, cause-and-effect relation about the workings of the world. It has been tested and retested through the scientific method. The law of demand, law of increasing opportunity cost, and law of diminishing marginal utility are three fundamental (and extremely important) economic laws of nature.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time wandering around the shopping mall wanting to buy either an AC adapter for your CD player or storage boxes for your family photos. Be on the lookout for vindictive digital clocks with revenge on their minds.
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This isn't me! What am I?
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A communal society, a prime component of Karl Marx's communist philosophy, was advocated by the Greek philosophy Plato.
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"Long-range goals keep you from being frustrated by short-term failures " -- J. C. Penney, Retailer
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ABA
American Bankers Association, Associate in Business Administration
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