In Developing Countries, Natural Disasters Are a Greater Risk for Poor

question 38

Multiple Choice

In developing countries, natural disasters are a greater risk for poor residents because ____. ​

• A)they are often forced to live in hazardous areas due to economic factors
• B)they are less likely to know the history of previous disasters in their region
• C)they are not well-educated and do not understand the danger
• D)they do not trust their governments and disobey laws that would keep them safe
• E)they find danger a desirable attribute because of their cultural traditions

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Definitions:

Payoffs

The returns or potential outcomes from an investment or decision, often associated with different scenarios.

Strike Price

The designated price point at which an option's holder has the right to purchase (in the case of a call option) or to sell (in the case of a put option) the underlying asset or commodity.

European Call

An option contract that gives the holder the right, but not the obligation, to buy an underlying asset at a specified price within a specified time, only exercisable at expiration.

American Call

An option contract that gives the holder the right to buy a security at a set price, called the strike price, at any time up to the expiration date.