No Arbitrage Is Equivalent to the Idea That All Risk-Free

question 60

Multiple Choice

No arbitrage is equivalent to the idea that all risk-free investments should offer investors ________.

• A) zero return
• B) the same return
• C) higher return
• D) lower return

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Definitions:

Conventional morality

A stage in moral development where individuals conform to societal norms and laws, often to uphold authority and maintain social order.

Kohlberg

A theorist known for his work on the development of moral reasoning in individuals, categorizing this development into stages.

Preindustrial societies

Societies characterized by an economy based on agriculture, with limited technological development and a predominance of subsistence farming.

Kohlberg's dilemmas

Moral dilemmas used by Lawrence Kohlberg in his research to study moral reasoning and the development of moral judgment across different stages of human life.