You Are Working for the Environmental Protection Agency and Researching

question 22

Multiple Choice

You are working for the Environmental Protection Agency and researching the effect of a potentially toxic chemical in drinking water. There is no documented scientific evidence showing that the chemical is toxic, but many suspect it to be a health hazard. Using the precautionary principle, what would be a reasonable environmental policy?

• A)Establish no regulations until there are conclusive scientific studies.
• B)Set the acceptable levels of the chemical conservatively low, and keep them there unless future studies show that they can be safely raised.
• C)Set the acceptable levels at the highest levels encountered, and keep them there unless future studies demonstrate negative health effects.
• D)Caution individuals to use their own judgment in deciding whether to drink water from a potentially contaminated area.
• E)Establish a contingency fund to handle insurance claims in the event that the chemical turns out to produce negative health effects.

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Definitions:

Investment Accounts

Accounts held at a financial institution that hold investments such as stocks, bonds, mutual funds, and ETFs, often for purposes of earning a return.

Trading Debt Securities

Securities bought and held primarily for sale in the near term to generate income on short-term price differences.

Fair Value

The estimated price at which an asset or liability could be traded in a fair transaction between willing parties.

Held-to-maturity Securities

Financial instruments that a company has the intent and ability to hold until they mature.