QUESTION 7

Which of the following does not contribute to the formation of financial bubbles?

A.
Limited arbitrage.

B.
Ambiguity aversion.

C.
Investor extrapolation.

D.
Arrival of good news.

10 points

QUESTION 8

In a society with a low level of mutual trust, businesses tend to

A.
Be more innovative.

B.
Grow fast.

C.
Pay more attention to social responsibility.

D.
Be small in size.

10 points

QUESTION 9

According to Gupta, Raman, and Shang (2020), social capital improves innovation productivity through which of the following channels?

A.
It encourages collaboration among employees.

B.
It enhances employees morale with equity based compensation.

C.
It reduces employees concern that their innovative outcomes would be appropriated by the management.

D.
It imposes harsher social punishment if employees do not deliver innovation.

10 points

QUESTION 10

The policy holder of a term insurance plan will not receive any return if he/she survives the duration of the policy, while the policy holder of a whole life insurance plan is guaranteed to be compensated upon death. People tend to be psychologically attracted to whole life insurance over term insurance because of

A.
Loss aversion

B.
Overextrapolation

C.
Availability heuristic

D.
Representative heuristic