In One Well-Known Study on Empathy, Participants Had to Watch

question 62

Multiple Choice

In one well-known study on empathy, participants had to watch a confederate ("Elaine") receive electric shocks. They were told either that they had to watch 10 full trials of shocks, or that they could leave after watching the first two trials only. They were also told that their values and interests were similar to those of the confederate (similar group) , or that their values and interests were different from those of the confederate (dissimilar group) . After the first two trials had been completed, participants were asked whether they would switch places with the confederate-she was apparently very upset by the shocks due to a negative childhood experience with electricity. The researchers found that, in the dissimilar group, ____ agreed to switch places.

• A) virtually no one
• B) many people in the 10-trial group but virtually no one in the two-trial group
• C) many people in both the 10-trial group and the two-trial group
• D) virtually everyone

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Definitions:

Hedge Ratio

The ratio used to determine the appropriate amount of hedging required to protect a position or portfolio from price fluctuations.

Option Smirk

A pattern on the implied volatility graph for options across different strike prices that shows asymmetric volatility, often indicating market anticipation of movement.

Black-Scholes Option

A mathematical model used to price European options and derivatives by estimating the variation over time of financial instruments.

Implied Volatility

The market's forecast of a likely movement in a security's price, often derived from the price of its options.