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Optimal Foraging Theory: A theory designed to predict the foraging behavior that maximizes food intake per unit time

Optimal Redemption Provision: Provision of a bond indenture that governs the issuer's ability to call the bonds for redemption prior to their scheduled maturity date.

Optimal Portfolio: An efficient portfolio most preferred by an investor because its risk/reward characteristics approximate the investor's utility function. A portfolio that maximizes an investor's preferences . . . View Full Definition

Organizational Behavior Modification Theory: A motivational theory suggesting that an individual will behave in a manner that helps him or her avoid potential negative outcomes and achieve agreeable outcomes.

Presidential Election Cycle Theory: A theory that stock market trends can be predicted and explained by the four-year presidential election cycle.

Pure Expectations Theory: A theory that asserts that forward rates exclusively represent the expected future rates. In other words, the entire term structure reflects the market's expectations of future short-term ra . . . View Full Definition

Proof Theory: This deals with the actual 'logic' of the programming. Using mathematical analysis techniques, the programming language is proof checked.

Preferred Habitat Theory: A biased expectations theory that believes the term structure reflects the expectation of the future path of interest rates as well as risk premium. The theory rejects the assertion that the . . . View Full Definition

Optimal Contract: The contract that balances the three types of agency costs (contracting, monitoring, and misbehavior) against one another to minimize the total cost.

Miasma Theory: The theory that diseases were caused by miasma or bad air arising from organic decay, filth, or other conditions of the local environment.