Snakes, Closed Spaces, Wild Animals, and Airplanes Are Common Sources

question 187

Multiple Choice

Snakes, closed spaces, wild animals, and airplanes are common sources of phobias for humans. Why might it be that humans are less often treated for phobias involving rainbows, smiles, or cheerful people?

• A) Negative events do not happen to us with positive stimuli.
• B) We are biologically and cognitively prepared to acquire certain fears.
• C) Positive events do not happen to us with negative stimuli.
• D) We are systematically exposed to more negative stimuli.

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Definitions:

Risk-Free Rate

A benchmark interest rate at which an investment is expected to yield a return without any risk of financial loss, usually associated with government securities.

Market Risk Premium

The extra return that investors require for choosing to invest in the general market rather than risk-free investments.

Beta

A measure of a stock's volatility in relation to the overall market; it indicates the stock's sensitivity to market movements.

Dividend Growth Model

A valuation method used to estimate the value of a stock by using predicted dividends and discounting them back to present value.