What, Typically, Is Used to Calculate the Opportunity Cost of Capital

question 43

Multiple Choice

What, typically, is used to calculate the opportunity cost of capital on a risk-free investment?

• A) the best expected return offered in any investment available in the market
• B) the interest rate on U.S. Treasury securities with the same term
• C) the interest rate of any investments alternatives that are available
• D) the best rate of return offered by U.S. Treasury securities

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Definitions:

Abstractly

Relating to the process of thinking in a way that is not anchored in concrete reality, but involves understanding concepts and ideas that are not physically present.

Cognitive Developmental Task

Activities or challenges that promote cognitive growth and development, tailored to an individual's age and stage of cognitive maturation.

Young Adulthood

A life stage occurring approximately from the late teens to the early thirties, characterized by exploration, independence, and the formation of intimate relationships.

Responsibility

The state or fact of being accountable or to blame for something, carrying a duty or obligation to act.