The Prudent Use of Derivatives to Hedge, or Reduce Risk

question 34

Multiple Choice

The prudent use of derivatives to hedge, or reduce risk, is similar to the concept of ________________.

• A)gambling
• B)juggling
• C)hiding
• D)religion
• E)none of the above.

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Definitions:

Reinforcement

A concept in psychology referring to any process that increases the likelihood of a behavior being repeated, using rewards or punishments following that behavior.

Social Learning

The process of acquiring skills, knowledge, and behaviors by observing and imitating others.

Bribery

The offering, giving, receiving, or soliciting of any item of value as a means of influencing the actions of an individual holding a public or legal duty.

Contextual Influences

The impact of environmental and situational factors on individuals' thoughts, behaviors, and feelings.