Carlos and Darla Are Playing the Dictator Game

question 230

Multiple Choice

Carlos and Darla are playing the dictator game. Carlos is assigned the role of dictator and given $20 to split between the two of them. Based on previous experiments with this game by behavioral economists, which is the least likely outcome?

• A)Carlos will keep all of the money for himself.
• B)Carlos will give all of the money to Darla.
• C)Carlos will split the money evenly with Darla.
• D)Carlos will split the money, keeping a little more than half for himself.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument.

Maturity

The final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

Annual Coupon

The total interest to be paid on a bond each year, divided between regular payment periods.

Bonds

Bonds are fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, where the borrower agrees to pay back the principal plus interest at a specified date.