In the Fall of 1998 We Saw an Increase in the Risk

question 79

Multiple Choice

In the fall of 1998 we saw an increase in the risk spread because:

• A) The risk spread always increases as we approach the end of the year
• B) The Russian government defaulted on some of its bonds
• C) There was an extraordinarily large amount of corporate fraud being reported in 1998
• D) There was a significant increase in U.S. income tax rates

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.