What Is a Subgame

question 238

Multiple Choice

What is a subgame?

• A)It is one that begins at any node of the tree, including the game itself.
• B)It is one that begins at any decision node of the tree except the first decision node.
• C)It is one that starts at the final decision node of the tree.
• D)It is a simultaneous game embedded in a sequential game.

---

Definitions:

Bankruptcy Costs

Expenses associated with the process of declaring bankruptcy, including legal, administrative, and direct costs.

Modigliani

Franco Modigliani, an economist known for his work in corporate finance, especially the Modigliani-Miller theorem regarding capital structure and the dividend irrelevance theory.

Miller

Often refers to a person who operates a mill, a machine to grind a cereal crop to make flour.

Risk

The exposure to potential financial loss or gain, often evaluated in decisions involving investment or finance.