The Species of Organism Whose Members Always Rationally Weigh All

question 49

Multiple Choice

The species of organism whose members always rationally weigh all the relevant costs and benefits in choosing the best course of action is called what

• A)Homo economicus
• B)Homo sapiens
• C)Homo rationalicus
• D)Homo microcosmicus

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Definitions:

Strike Price

The price at which the holder of an option can buy (in a call option) or sell (in a put option) the underlying security.

Intrinsic Value

The actual value of a company or an asset based on underlying perception of its true value including all aspects of the business.

November 45 Call

A call option that gives the holder the right to buy a particular stock at a price of $45 per share, expiring in November.

Pure Discount Bond

A type of bond that is issued at a discount to its nominal value and pays no interest, but is redeemed at its face value at maturity.