The Process Where Financial Intermediaries Create and Sell Low-Risk Assets

question 29

Multiple Choice

The process where financial intermediaries create and sell low-risk assets and use the proceeds to purchase riskier assets is known as

• A)risk sharing.
• B)risk aversion.
• C)risk neutrality.
• D)risk selling.

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Definitions:

Negative Reinforcement

The removal of a stimulus to increase the probability that a behavior will be repeated.

Positive Punishment

The addition of a stimulus to decrease the probability that a behavior will recur.

Primary Reinforcement

A term in behavioral psychology that refers to something that is naturally rewarding or satisfying, like food or water, that reinforces a behavior.

Variable Interval

A schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed, used in operant conditioning.