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Explain the Intuition Behind the Link Between High Long Term

question 7

Essay

Explain the intuition behind the link between high long term yields and higher risk aversion of market participants.


Definitions:

Physiological State

The condition of normal function of an organism at any given time, encompassing various physical and chemical processes.

Lysergic Acid Diethylamide (LSD)

A potent psychedelic drug known for altering perception, mood, and thoughts, often producing visual hallucinations.

Ecstasy

An overwhelming feeling of great happiness or joyful excitement.

Crack

A potent form of cocaine that is smoked and has a rapid, intense, and short-lived high, often associated with severe addiction and social problems.

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