Dmitry Emigrated to the United States from a Formerly Communist

question 205

Multiple Choice

Dmitry emigrated to the United States from a formerly communist country. He is looking to you for advice on how to succeed in a capitalist system. He would be well advised to

• A) find a job and live frugally in order to save money to invest.
• B) rely heavily on government assistance programs to maintain a relatively comfortable life style.
• C) get a credit card, even if it has a very low credit limit, and use it to establish a good credit rating.
• D) follow the buy now, pay later rule of personal finance.

---

Definitions:

Firm's Assets

All items of value owned by a company, such as cash, equipment, and intellectual property.

Call Option

An economic deal that permits the buyer to have the option to acquire a stock, bond, commodity, or another asset at a predetermined price during a designated period, without being obligated to do so.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specific time.

Warrant

An instrument that gives the holder the right, but not the obligation, to buy or sell a certain asset at a specified price prior to or on a specific date.