Considering the Value of a Financial Instrument, the Circumstances Under

question 61

Multiple Choice

Considering the value of a financial instrument, the circumstances under which the payment is to be made influence the value because:

• A)We like uncertain payoffs because this adds to the return
• B)Payments that are made when we need them the most are more valuable
• C)The sooner the payment is to be made the better
• D)We know when certain events are going to occur and that is when we want the payment

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Definitions:

Overgeneralization

A cognitive distortion where an individual draws a general rule or conclusion based on a single or limited number of events.

REBT

Rational Emotive Behavior Therapy, a form of psychotherapy that helps individuals identify irrational beliefs and patterns of thinking to develop healthier emotional responses and behaviors.

ABC Model

A cognitive-behavioral approach suggesting that it is not merely events that cause an individual distress, but rather the beliefs about those events.

Irrational Beliefs

False or unrealistic thoughts that can lead to emotional distress and behavioral problems.