The Way That Lenders Charge a Higher Interest Rate for Loans

question 15

Multiple Choice

The way that lenders charge a higher interest rate for loans assessed to be of higher risk is known as:

• A) risk aversion.
• B) wealth maximisation.
• C) claim dilution.
• D) price protection.

---

Definitions:

Conditioned Animal

An animal that has learned to respond in a specific way to a conditioned stimulus through the process of conditioning.

Stimulus Chaining

involves teaching a sequence of actions by reinforcing each behavior with the opportunity to perform the next behavior until the final action is achieved.

Higher-order Conditioning

A learning process wherein a conditioned stimulus is paired with a new neutral stimulus, creating a second (often weaker) conditioned response.

Higher-order Conditioning

A complex form of classical conditioning where a stimulus previously paired with a primary unconditioned stimulus becomes a conditioned stimulus for further training.