Future Costs That Differ Across Alternatives Are Referred to As

question 31

Multiple Choice

Future costs that differ across alternatives are referred to as:

• A)sunk costs.
• B)relevant costs.
• C)marginal costs.
• D)period costs.

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Definitions:

Risk Exposure

Risk exposure is the measure of potential future losses that may result from business activities or investment decisions, due to risks that have been taken.

Variable-Rate Loan

A loan in which the interest rate can change over time, based on an underlying benchmark interest rate or index.

Interest Rate Cap

A financial derivative contract that limits the maximum interest rate a borrower has to pay on a variable-rate loan.

Futures Contracts

Standardized agreements to buy or sell a commodity or financial asset at a future date and price.