Eliminating All Possible Risk Will Ultimately

question 132

Multiple Choice

Eliminating all possible risk will ultimately

• A) guarantee the highest possible cash flow over the long run.
• B) cancel out all profits with cost of hedging.
• C) result in lower expected cash flow but the highest cash flow for the worst case scenario.
• D) guarantee that the firm will not experience losses.

---

Definitions:

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a desired behavior strengthens that behavior.

Positive Punishment

Adding an unfavorable outcome or consequence after an undesired behavior to decrease the likelihood of that behavior occurring again.

Negative Punishment

A behavior modification technique involving the removal of a desirable stimulus to decrease the frequency of a behavior.

Associative Learning

A learning process that involves connecting a stimulus with a response or connecting two stimuli together.