Meg Has Exceeded Her Budget by at Least $200 Every

question 81

Multiple Choice

Meg has exceeded her budget by at least $200 every month for the last three months. After recognizing that this is a problem, she decides to use the rational decision-making model to decide what to do. What should be the next step she should take, if she follows this model?

• A) determine what criteria she needs to take into account when making her decision
• B) choose a method to cut her expenses
• C) implement some other method of budgeting
• D) come up with different ways that would either reduce her expenses or increase her income
• E) evaluate different ways that she could use to either reduce her expenses or increase her income

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Definitions:

Unrealized Holding Gain

The increase in value of an asset that is still held by an entity and has not been sold for a profit.

Trading Security

A financial asset that a company holds primarily for the purpose of selling it in the short term to profit from price changes.

Available-For-Sale Security

A financial asset that is neither classified as held-to-maturity nor held for trading, and the investor intends to sell if needed before its maturity or holding period ends.

Perfectly Matched Hedge

A hedging strategy that entirely eliminates the risk of a particular position by taking an offsetting position in the market.