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The Financial System Allows Some Savers and Borrowers to Transfer

question 13

Essay

The financial system allows some savers and borrowers to transfer risk to other savers and borrowers. Why do savers and borrowers differ in their willingness to bear risk?


Definitions:

Low Self-efficacy

A personal belief in one's inability to succeed or accomplish tasks, often leading to decreased motivation and achievement.

Internal Locus

A psychological term referring to individuals who believe they can influence their life events and outcomes through their own efforts.

High Conscientiousness

A personality trait characterized by diligence, carefulness, thoroughness, self-discipline, and the ability to regulate oneself effectively.

Self-efficacy

The belief in one's own ability to execute behaviors necessary to produce specific performance attainments.

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