Statements about opportunity costs

Assignment Help Financial Management

Reference no: EM13882197

Which of the following statements about opportunity costs is incorrect?

a. The opportunity cost rate to be applied to any investment is the rate of return that could be earned on alternative investments of similar risk.

b. In general, higher-risk investments should have higher opportunity costs than lower-risk investments have.

c. Opportunity cost rates are normally obtained by examining the returns on securities investments.

d. The opportunity cost rate typically is applied in discounting situations (as opposed to compounding).

e. Say you just inherited $10,000. Because this money cost you nothing, it has an opportunity cost rate of zero.

Reference no: EM13882197

Questions Cloud

Identify some factors that might cause the loan rate : Identify some factors that might cause the loan rate to vary when BA provides the quote. Also, indicate any impact on the established MARR when Carl and Christy make economic decisions for their business

Use of debt within the capital structure selected by firm : Which one of the following is the risk arising from the use of debt within the capital structure selected by a firm?

Ethical principles contribute to good business operations : Ethical principles contribute to good business operations

The company expects the machine to operate : 1.On January 1, 2013, Canseco Plumbing Fixtures purchased equipment for $30,000. Residual value at the end of an estimated four year service life is expected to be $2,000.

Statements about opportunity costs : Which of the following statements about opportunity costs is incorrect?

Executing unauthorized trades for an investment account : The practice of executing unauthorized trades for an investment account by a salesman or broker in order to generate commission from the account. A civil wrong, not arising from a contract, for which a court will provide a remedy. A form of business ..

Provide a one or two-sentence description of each project : Since transportation via automobile was introduced, drivers throughout country of Yalturia in eastern Europe have driven on the left side of the road. State a name and provide a one- or two-sentence description of each project.

A type of deed often referred to as a mortgage : Profits made by directors, officers, or owners of 10 percent or more of the securities of a corporation as a result of buying and selling the securities within a six month period. A type of business organization formed and authorized by state law to ..

Explain why it is important to keep abreast of developments : Briefly outline to John the process that will occur from your meeting onwards and although some of these stages do not involve the mortgage broker, briefly explain why it is important to keep abreast of developments.

User Account

All Pages