Opportunity Cost Is Defined As

question 10

Multiple Choice

Opportunity cost is defined as:

• A) the value of the next best alternative that is not chosen
• B) the lowest price at which a good can be purchased
• C) the wages paid by a firm to its workforce
• D) none of the above

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Definitions:

Share

A unit of ownership interest in a corporation or financial asset that gives the holder a claim on part of the corporation's assets and earnings.

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment, calculated by subtracting the risk-free rate from the return of the investment and dividing by the standard deviation of the investment's returns.

Risk-Free Return

The theoretical return on an investment with zero risk, typically associated with government bonds.

Jensen's Measure

A performance evaluation tool that measures the excess return of a portfolio above the expected return, accounting for risk.