In the Context of Risks to New Businesses, Identify a True

question 29

Multiple Choice

In the context of risks to new businesses, identify a true statement about risk tolerance.

• A)What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.
• B)Risks must be determined by entrepreneurs based on the findings of focus groups with other entrepreneurs in the same industry.
• C)In new markets, entrepreneurs must be willing to put up with risks that outweigh their personal risk tolerance.
• D)Entrepreneurs can avoid a majority of the risks associated with new start-ups by allowing competitors to invest in their new businesses.

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Definitions:

Reaction Formation

A psychological defense mechanism where an individual acts in the opposite way to their unacceptable impulses, often exhibiting exaggerated behavior.

Psychological Defense Mechanism

Strategies employed by the unconscious mind to protect itself from anxiety arising from unacceptable thoughts or feelings.

Freud

Sigmund Freud was a neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Defense Mechanisms

Subconscious tools used to safeguard against distress caused by unwanted or unacceptable emotions and ideas.