The Principle of Opportunity Cost

question 74

Multiple Choice

The principle of opportunity cost:

• A) is only relevant in economics.
• B) is more relevant for firms than for individuals.
• C) only refers to monetary payments.
• D) is applicable to all decision- making.

Understand the significance of market valuation ratios including P/E ratio, market/book ratio, and calculate them.

Understand the definition and scope of sociology as a systematic and scientific study of human society and social behavior.

Recognize the weaknesses and limitations of the sociological approach and the everyday actor perspective.

Grasp the concept of sociological imagination and its significance in connecting individual experiences with larger social and historical forces.

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Definitions:

Face Value

The nominal value printed on a bond or stock certificate; it does not fluctuate with market prices.

Forward Rate

The agreed-upon price for a transaction that will occur at a future date, as in a forward contract.

Zero-Coupon Bond

A bond that is sold at a discount and pays no interest, but is redeemed at its face value at maturity, generating a profit for the holder.

Yield

The income return on an investment, such as the interest or dividends received, usually expressed as an annual percentage of the investment's cost.