Which of the Following Is True of Sunk Costs

question 23

Multiple Choice

Which of the following is true of sunk costs?

• A)It is a type of opportunity cost.
• B)It is a type of implicit cost.
• C)It should be ignored when making decisions.
• D)It includes annual costs like payroll,insurance expenses,etc.

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Definitions:

Volatility

Refers to the degree of variation of a trading price series over time, indicating the level of uncertainty or risk associated with a security's value.

Hedge Ratio

A ratio used to adjust or hedge the risk exposure of an investment by comparing the value of the position protected to the value of the protective instrument.

Hedge Ratio

A ratio used to determine the portion of an asset or portfolio that is protected or hedged against market movements.

Dollar Change

The absolute difference in the value of a financial instrument, currency or commodity's price from one period to another.