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Eleanor has money to invest and is considering buying a company. When comparing her alternatives, her ________ on any investment is the rate of return that she could earn on a similar investment.

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Answer:

OPPORTUNITY COST

Step-by-step explanation:

Eleanor has money to invest and is considering buying a company. When comparing her alternatives, her opportunity cost on any investment is the rate of return that she could earn on a similar investment.

Investors are generally presented with options about what to invest their money in, in order to receive not just the highest but also the safest return. However if the investor chooses an alternative, the return he would have earned from the other investment becomes the opportunity cost of the foregone alternative.

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