The Potential Benefits Lost by Taking a Specific Action When

question 132

Multiple Choice

The potential benefits lost by taking a specific action when two or more alternative choices are available is known as a(n) :

• A)Alternative cost.
• B)Sunk cost.
• C)Out-of-pocket cost.
• D)Differential cost.
• E)Opportunity cost.

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Definitions:

Inflation Premium

The extra yield on an investment that investors require as compensation for the loss of purchasing power due to inflation.

Bond Payments

The regular interest payments made to bondholders, as well as the return of principal at the bond's maturity date.

Debenture

An unsecured loan certificate issued by a company, backed by general credit rather than by specified assets.

Issuing Firm

A company that offers securities to the public or existing shareholders.