Among a Set of Alternatives with the Same Benefits,an Individual

question 26

Multiple Choice

Among a set of alternatives with the same benefits,an individual is said to optimize if she chooses an alternative that ________.

• A) has the lowest total cost
• B) has the highest total cost
• C) has the highest indirect cost
• D) has the lowest opportunity cost

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Definitions:

Fixed-Rate Loan

A loan where the interest rate remains constant throughout the term of the loan, providing predictability in payments.

Mortgage Broker

A professional intermediary who facilitates the process of acquiring a mortgage loan for individuals or businesses.

Maturity

Maturity, in the context of finance, refers to the date on which the final payment of a loan or financial instrument must be paid back in full.

Line of Credit

A flexible loan from a bank or financial institution that offers a maximum loan balance that can be used over time.