All Else Equal,the Higher the Call Premium

question 95

Multiple Choice

All else equal,the higher the call premium,

• A) the smaller the drop in rates necessary for a call to be beneficial.
• B) the larger the drop in rates necessary for a call to be beneficial.
• C) the more likely any rate drop will lead to a call.
• D) none of the above; the call premium does not affect the call decision.

---

Definitions:

Generalization

In psychology, the process of responding similarly to stimuli that are similar but not identical to the original conditioned stimulus.

Discrimination

The unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.

Cognitive Processes

Mental actions or operations that include thinking, reasoning, problem-solving, decision-making, and memory.

Associative Learning

A learning process where a relationship is formed between two stimuli or between a stimulus and a behavior.