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

Question

Quizplus · Accepted Answer

The interest rate on U.S. Treasury securities with the same term is typically used to calculate the opportunity cost of capital on a risk-free investment as these securities are considered to be the safest investment available and provide a risk-free rate of return.

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