If the Interest Rate on Saving Is 5 Percent Per

question 145

Multiple Choice

If the interest rate on saving is 5 percent per period, then the true opportunity cost of being paid $100 next period instead of this period is

• A)$5.
• B)$105.
• C)less than $5 if people suffer from a "defective telescopic faculty."
• D)more than $5 if people suffer from a "defective telescopic faculty."

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Definitions:

Common Shares

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company’s profits via dividends.

Internet Companies

Businesses that operate primarily on the internet, offering services or products through digital platforms, often focusing on technology, e-commerce, or social media.

Growth Opportunities

Potential scenarios or projects that can increase the profitability and size of a business.

Earnings Yields

The inverse of the price-to-earnings ratio, representing the earnings generated by a company per share relative to its share price, often used to compare the profitability of investments.