Elinore Is Asked to Invest $5000 in a Friend's Business

question 43

Multiple Choice

Elinore is asked to invest $5000 in a friend's business with the promise that the friend will repay $5500 in one year's time.Elinore finds her best alternative to this investment,with similar risk,is one that will pay her $5400 in one year's time.U.S.securities of similar term offer a rate of return of 6%.What is the opportunity cost of capital in this case?

• A)6%
• B)8%
• C)9%
• D)10%

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Definitions:

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The smallest amount of change in a stimulus that can still be sensed or identified.

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The property of something to exhibit characteristics of two distinct categories or phenomena.

Waves and Particles

Fundamental concepts in physics describing the dual nature of light and matter, showing properties of both waves and discrete particles.