You Decide to Lend $100 to a Friend Interest Free

question 21

Multiple Choice

You decide to lend $100 to a friend interest free for one year. You calculate that you could have earned 10% interest. What is the opportunity cost of the loan if it is paid on time?

• A)$10
• B)$100
• C)$110
• D)$0

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Definitions:

Market Value

The estimated price at which a good or service would trade in a competitive marketplace.

Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.

Officer

An individual holding a position of authority or command, especially within a governmental, military, or corporate structure, responsible for enforcing laws or policies.

Shareholders

Investors in a corporation, who own the corporation.