"If I Didn't Have a Date Tonight, I Would Save

question 131

Multiple Choice

"If I didn't have a date tonight, I would save $10 and spend the evening playing tennis." The opportunity cost of the date is

• A) the other things that could be purchased with the $10.
• B) the other things that could be purchased with the $10 plus the forgone value of a night of tennis.
• C) dependent upon how pleasant a time one has on the date.
• D) the forgone value of a night of tennis.

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Definitions:

Market Risk Premium

The extra yield an investor anticipates earning by choosing a volatile market portfolio over secure, risk-free investments.

Required Return

Required return is the minimum gain an investor expects to achieve from an investment, accounting for the risk level compared to the return of a risk-free asset.

Risk-Free Rate

The return on investment with no loss of principal, often represented by the yield on government securities.

Beta

An indicator that determines the systematic risk or volatility of a security or a portfolio relative to the overall market.