Forward Contracts Are of Limited Usefulness to Financial Institutions Because

question 77

Multiple Choice

Forward contracts are of limited usefulness to financial institutions because

• A)of default risk.
• B)it is impossible to hedge risk.
• C)they are relatively inflexible.
• D)of interest-rate risk.

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Definitions:

Social Decentering

The cognitive ability to step outside one's own thoughts and feelings to consider the perspectives, thoughts, and feelings of others.

Causal Attribution

The process by which individuals explain the causes of behavior and events, attributing them to internal dispositions or external situations.

Enculturation

The process by which individuals learn the dynamics of their surrounding culture and acquire values and norms appropriate or necessary in that culture.

Platinum Rule

Guiding principle that encourages treating others the way they want to be treated, reflecting empathy and understanding of personal preferences.