Analyze the Situation and Explain How You Would Make a Decision

question 153

Essay

Analyze the situation and explain how you would make a decision.
-The costs per day of driving to work are $5 for gas, $10 for parking, and $1 for
wear-and-tear on the car. Taking the train to work costs $6.50 each way, plus $1.50 per
day to park at the train station. Should you drive or take the train?

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Definitions:

Exercise Price

The price at which the holder of an options contract may buy (in the case of a call) or sell (in the case of a put) the relevant security or commodity.

Expiration Date

In finance, the date at which a derivative contract such as an option or futures agreement ceases to exist.

Tax-Exempt Bonds

Bonds issued by government entities that offer interest payments not subject to federal income tax, and in some cases, state and local taxes.

Yield

The income return on an investment, such as the interest or dividends received, expressed as an annual percentage based on the investment's cost, its current market value, or its face value.