According to Proponents of Behavioral Economics, Because Every Possible Choice

question 302

Multiple Choice

According to proponents of behavioral economics, because every possible choice cannot be considered, an individual will tend to fall back on methods of making decisions that are simpler than trying to sort through every single possibility, known as

• A) rules of thumb.
• B) rational options.
• C) irrational choices.
• D) normative decisions.

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Definitions:

Sell the Stock

An action where an investor disposes of their ownership in a corporation through the sale of its shares.

Maintenance Margin

The minimum equity amount that must be maintained in a margin account after a purchase has been made, to cover the risk of the investment.

Margin Call

A demand by a broker that an investor deposit further cash or securities to cover possible losses.

Initial Margin

The minimum amount of equity required to enter into a position as security for performance, used in futures and margin trading.