The So-Called "Flight to Quality" Causes the Risk Differential Between

question 41

Multiple Choice

The so-called "flight to quality" causes the risk differential between risky and risk-free securities to be

• A) eliminated.
• B) reduced.
• C) increased.
• D) unchanged (there is no effect).

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Definitions:

Non-compensatory Rule

A decision strategy where an option is rejected if it fails to meet some minimum criterion, regardless of its attributes elsewhere.

Compensatory Rule

A decision rule used in consumer behavior that allows for a trade-off among the strengths and weaknesses of different products or options.

Product Attributes

Characteristics or features that pertain to a specific product, such as size, color, price, quality, and performance.

Brand Loyalty

The tendency of consumers to continuously purchase the same brand's products or services over time.