What is meant by the term 'Investor's Opportunity Cost'?
A) The cost involved in offering the investor the opportunity to invest
B) The discounted cash costs of the investment
C) The loss in the value of the funds invested resulting from inflation
D) The sacrifice of the return available on the best forgone alternative with equivalent risk

Question

Quizplus · Accepted Answer

'Investor's Opportunity Cost' refers to the sacrifice of the return available on the best forgone alternative with equivalent risk. In other words, it represents the potential return an investor gives up by choosing one investment over another with a similar level of risk. Option A, B, and C are not accurate descriptions of 'Investor's Opportunity Cost'.

What Is Meant by the Term 'Investor's Opportunity Cost