Which of the Following Statements Is True

question 55

Multiple Choice

Which of the following statements is true?

• A)One advantage of using MPT for loans is that the returns on individual loans are normally distributed, meaning that the upside returns are equal to the downside risks.
• B)One objection to using MPT for loans is that the returns on individual loans are not normally distributed, meaning that most loans have unlimited upside returns and long-tail downside risks.
• C)One advantage of using MPT for loans is that the returns on individual loans are normally distributed, meaning that most loans have unlimited upside returns and unlimited downside risks.
• D)One objection to using MPT for loans is that the returns on individual loans are not normally distributed, meaning that most loans have limited upside returns and long-tail downside risks.

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Definitions:

William McDougall

A psychologist known for his work on instinct theory and social psychology, advocating for the inclusion of innate tendencies in explaining behavior.

Human Instincts

Innate, biologically determined behaviors that are present at birth, driving individuals towards certain actions or responses without the need for learning, such as the instinct for survival.

Extrinsic Motivation

Motivation that is driven by external rewards such as money, fame, grades, or praise rather than internal factors.

External Reward

Motivation that comes from outside of the individual, often in the form of praise, money, or a physical reward.