Which answer best defines "opportunity cost"?
A What it costs to take advantage of a great savings opportunity.
B The value of the things you have to give up to get something else.
C The amount you have to pay to do something.
D The amount a seller paid to sell you a product. - B The value of t...
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Which answer best defines "opportunity cost"?
A What it costs to take advantage of a great savings opportunity.
B The value of the things you have to give up to get something else.
C The amount you have to pay to do something.
D The amount a seller paid to sell you a product. - ✔✔B The value of the things you have to give up to
get something else.
Which of these are examples of opportunity cost?
A You skip buying new jeans and put the money in your college fund.
B You deposit your entire paycheck in your investment account instead of cashing it and taking your
buddies out to eat.
C You bring your lunch to your part-time job instead of spending $8 on lunch. You put the $8 in your
savings account.
D All of the above. - ✔✔D All of the above.
Which one of the following are examples of unnecessary debt?
A You buy an expensive new car rather than a perfectly good used car.
B You buy your groceries on Friday instead of coupon Monday.
, C You charge clothes you don't really need on a high-interest store credit card.
D Both A and C. - ✔✔D Both A and C.
If you are saving money to buy a house in eight years your "time horizon" is:
A Eight years.
B Seven years.
C Seven and a half years.
D Ten years because of house expenses. - ✔✔A Eight years.
What is "compound interest"?
A Interest that is accumulated over a period of time but only occurs in a passbook savings account.
B When you earn interest on the interest you have already made.
C When you earn interest on only the principal.
D When you earn interest on the difference between the principal and interest - ✔✔B When you earn
interest on the interest you have already made.
Why do many experts recommend longer "time horizons" if you are making high-risk investments?
Choose the most correct answer.
A If you have a longer time horizon you are capable of making more in interest in that time period.
B A longer period of time gives you the opportunity to learn more about investing.
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