Which of the Following Arises When People Behave Recklessly Because

question 83

Multiple Choice

Which of the following arises when people behave recklessly because they know they will be saved if things go wrong?

• A)Systemic risk
• B)Moral hazard
• C)Ethical dilemma
• D)Tragedy of the commons
• E)Risk compensation

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Definitions:

Net Present Value

A financial metric that calculates the value of a projected income stream in today's dollars, net of the initial investment.

Discount Factor(s)

A multiplier used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the time value of money.

Discount Rate

Discount rate is the interest rate used to determine the present value of future cash flows, essential in evaluating investment opportunities and financial decisions.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of investments.