Which of the Following Is an Example of Opportunity Cost

question 268

Multiple Choice

Which of the following is an example of opportunity cost not measured by money cost?

• A)The time spent eating a business lunch at a restaurant
• B)The time spent preparing a meal eaten at home
• C)The time spent studying to obtain an "A" in economics
• D)The time spent repairing a car in one's own garage
• E)All of the responses are correct.

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Definitions:

Call Option

A financial agreement which permits the purchaser the option, though not the requirement, to purchase a specific asset like a stock, bond, commodity, or another type of asset at a predetermined price during a defined timeframe.

Exercise Price

The price at which the holder of an option can buy (call) or sell (put) the underlying security.

Protective Put

An investment strategy where an investor buys a put option for an asset they own to limit potential losses if the asset's price falls.

T-bill Rate

The interest rate earned by investors in U.S. Treasury bills, which are short-term government securities.