Noah Thinks of Himself as an Excellent Negotiator When Purchasing

question 20

Multiple Choice

Noah thinks of himself as an excellent negotiator when purchasing cars.Two months after Noah's purchase,his brother-in-law gets the same model for $1,000 less! According to cognitive dissonance theory,Noah

• A)will decide that he was wrong and that he isn't that good at negotiating a good car price.
• B)will decide that he is glad he had the car for those 2 months,even though prices soon dropped.
• C)will ask his brother-in-law to come along with him the next time he purchases a car.
• D)will begin to dislike his new car,noticing all the little details that bother him.

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuer's equity shares at certain times during the bonds' life, usually at the discretion of the bondholder.

Implicit Call Option

An option embedded in a financial security that allows the issuer to repurchase it at a predetermined price before maturity, not explicitly stated within the contract.

ESOs

Employee Stock Options (ESOs) are a form of equity compensation granted by companies to employees, allowing them to purchase company shares at a fixed price for a certain period.

Call Options

Financial derivatives that give the holder the right but not the obligation to buy a specific stock or asset at a predetermined price within a specified period.