A Decrease in the Value of Stocks, Bonds, or Other

question 63

Multiple Choice

A decrease in the value of stocks, bonds, or other investments may cause investors to experience ____________ risk.

• A)market
• B)interest rate
• C)business failure
• D)inflation
• E)income

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Definitions:

Opportunity Cost

The charge of rejecting the following prime opportunity in the process of decision-making.

Sunk Costs

Sunk costs are expenditures that have already been incurred and cannot be recovered, and should not affect future investment decisions or operations.

Opportunity Costs

The forfeit of discarding the next top choice during the decision-making procedure.

Scarce Resources

Resources that are limited in availability and cannot satisfy all the various uses for them, leading to competition and the need for allocation.