Which of the Following Financial Instruments Is Used Mainly to Transfer

question 73

Multiple Choice

Which of the following financial instruments is used mainly to transfer risk?

• A) Asset-backed securities
• B) Bonds
• C) Options
• D) Stocks

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Definitions:

Identical Expected Values

Situations where two or more uncertain alternatives have the same expected outcome or result.

Investment Opportunity

A financial or economic chance to invest capital with the expectation of achieving a profitable return.

Risk Averse

Condition of preferring a certain income to a risky income with the same expected value.

Expected Benefit

The anticipated or forecasted gain or advantage that arises from a specific action or decision, often considered in cost-benefit analysis.