A Common Strategy to Reduce the Risk of a Large

question 224

Multiple Choice

A common strategy to reduce the risk of a large financial loss is:

• A)to buy and sell assets through a mutual fund, since mutual funds cannot lose money.
• B)to diversify financial assets so that their risks of failure are unrelated.
• C)to buy financial assets from developing countries, because the rates of return are very high and safe and their national currencies are much more stable than the U.S. dollar.
• D)to buy real instead of financial assets.

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Definitions:

Food Deprivation

A condition resulting from lack of food intake, leading to physical and psychological effects and often used in experiments to motivate behaviors in animals.

Eyeblink Response

A reflex action where the eyelids close rapidly to protect the eyes, typically triggered by sudden stimuli.

Guthrie

Refers to Edwin Ray Guthrie, a psychologist known for his "one-trial learning" theory, proposing that learning occurs in a single association between stimulus and response.

Single Trial

A learning process that occurs or is influenced significantly by one instance or exposure, often used in the context of memory or conditioning studies.