You Are Trying to Decide in Which of the Three

question 115

Multiple Choice

You are trying to decide in which of the three companies you should invest. Refer to the following
Payoff Table.
If the market declines in the next year, which of the following statements are correct?
i. The Opportunity Loss for Company A is $300.
ii. The Opportunity Loss for Company B is $30.
iii. The Opportunity Loss for Company C is $500.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) is a correct statement but not (ii) or (iii).
• C) (ii) is a correct statement but not (i) or (iii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

---

Definitions:

Economists

Professionals who study, develop, and apply theories and concepts from economics to analyze how societies utilize scarce resources to produce valuable commodities and distribute them among different people.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the principal amount.

Loan

A sum of money borrowed that is expected to be paid back with interest.

Economic Profit

The financial gain achieved by a firm or individual after deducting both explicit (direct) and implicit (indirect, such as opportunity costs) costs from total revenues.