Which of the Following Is True? Choose One)

question 7

Multiple Choice

Which of the following is true? choose one)

• A) Risk-neutral default probabilities are usually much lower than real-world default probabilities.
• B) Risk-neutral default probabilities are usually much higher than real-world default probabilities
• C) Risk-neutral and real-world probabilities must be close to each other if there are to be no arbitrage opportunities default.
• D) Risk-neutral default probabilities cannot be calculated from CDS spreads.

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Definitions:

Conservative Tide

Refers to a period in political history characterized by a shift towards conservative values and policies, often marked by reduced government intervention in the economy and a focus on traditional social norms.

Liberals

Refers to individuals or political groups advocating for policies that prioritize liberty, equality, and consent of the governed, often supporting government intervention to achieve social justice.

Moderates

Individuals or politicians who hold views that are not extreme, radical, or partisan, and often seek compromise.

Political Socialization

The process by which individuals learn and frequently internalize a political lens framing their perceptions of how power is arranged and how the world around them is (and should be) organized.