Which of the Following Statements Is True

question 5

Multiple Choice

Which of the following statements is true?

• A)If many loans have negative correlations of returns the sum of the individual credit risks of loans viewed independently exactly estimates the risk of the whole portfolio.
• B)If many loans have negative correlations of returns the sum of the individual credit risks of loans viewed independently underestimates the risk of the whole portfolio.
• C)If many loans have positive correlations of returns the sum of the individual credit risks of loans viewed independently overestimates the risk of the whole portfolio.
• D)If many loans have negative correlations of returns the sum of the individual credit risks of loans viewed independently overestimates the risk of the whole portfolio.

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Definitions:

Delayed Reinforcer

A reinforcement given some time after the desired behavior, which can still effectively strengthen the behavior despite the delay.

Immediate Reinforcer

A reward or consequence that immediately follows a behavior, increasing the likelihood of that behavior being repeated.

Blisspoint

The optimal level of consumption or exposure where consumer satisfaction is maximized, often used in context with food flavors or media content.

Delay-Reduction Theory

Behavior economic theory that states that overall behavior in a choice task is based on the matching law, while individual choices are determined by which choice produces the shortest delay in the next reinforcement