An Irrelevant Cost

question 97

Multiple Choice

An irrelevant cost:

• A)is also called a differential cost.
• B)must differ between decision alternatives.
• C)must be incurred in the future rather than in the past.
• D)will not influence a decision.

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Definitions:

Arbitrage Profits

Profits earned with no risk by simultaneously buying and selling the same asset in different markets to exploit price discrepancies.

Spot Gold

The current market price at which gold can be bought or sold for immediate delivery.

Risk-free Rate

The hypothetical yield of a risk-free investment, commonly signified by the interest rate on government bonds.

Cumulative Return

Cumulative return is the aggregate amount of money gained or lost by an investment over a set period, typically expressed as a percentage.