Which of the Following Statements Best Represents What Finance Is

question 8

Multiple Choice

Which of the following statements best represents what finance is about?

• A)How political,social,and economic forces affect corporations
• B)Maximizing profits
• C)Creation and maintenance of economic wealth
• D)Reducing risk

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Definitions:

Future

Refers to the time that is yet to come, also used in finance as a contract to buy or sell an asset at a predetermined future date and price.

Time Inconsistency

A situation where a decision-maker's preferences change over time, making plans formulated at one time incompatible or less desirable at a future time.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method or decision.

Self-Control Problem

The difficulty individuals face in resisting temptation or immediate gratification to achieve long-term goals.