What Is Meant by the Concept of a Nash Equilibrium

question 98

Multiple Choice

What is meant by the concept of a Nash equilibrium?

• A) It is an outcome where the player has played his or her dominant strategy.
• B) It is an outcome where both players have the incentive to change their strategy.
• C) It is the outcome where neither player wishes to change his or her strategy unilaterally.
• D) It is the same as a dominant strategy outcome.

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Definitions:

Cost of Equity

The theoretical disbursement a firm makes to its equity stakeholders as remuneration for the risk they bear by putting their capital into the business.

Dividend Growth Model

A valuation model that estimates the price of a company's stock based on the expected dividends and their growth rate.

After-tax Cost

The cost of an investment or expense after the effects of income tax have been taken into account.

Required Return

The minimum return that investors expect or require from an investment to compensate for its risk.