CAT Questions

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Inflation risk, also called purchasing power risk, is the chance that the cash flows from an investment won't be worth as much in the future because of changes in purchasing power due to inflation.

HOW IT WORKS (EXAMPLE):

For example, $1,000,000 in bonds with a 10% coupon might generate enough interest payments for a retiree to live on, but with an annual 3% inflation rate, every $1,000 produced by the portfolio will only be worth $970 next year and about $940 the year after that. The rising inflation means that the interest payments have less and less purchasing power. And the principal, when it is repaid after several years, will buy substantially less than it did when the investor first purchased the bonds.

The main motive behind dealer incentives is to give the products at some low price for the dealers who take the products in bulk and maintain good selling of these products.

An orthodontist is the type of doctor that specializes in teeth and jaw alignment. When the teeth don't align properly, it can cause uneven wear in the teeth.

The jaw is a hinge joint. Strong muscles in the face open and close the jaw. Teeth are implanted in the jaw and serve to rip, tear and crush food in preparation for swallowing it.

Frankenstein is an English Novel by Mary Shelley. In Frankenstein, Victor is a character who changes from an optimistic, eager young man to one who is anxious and Remorseful.

After 200 years of long British rule, India got independence in 1947. India was then divided into two muslim majority Pakistan and Hindu majority India.

The principle of diversification tells us that spreading an investment across many diverse assets will eliminate some of the total risk.

Radon gas is a source of natural groundwater pollution.