Chartered Financial Analyst Level 1
Get started today
Ultimate access to all questions.
Comments
Loading comments...
Ultimate access to all questions.
An investor is evaluating the opportunity cost of investing in a Certificate of Deposit (CD) with a 2.2% interest rate compared to other CDs with higher rates. Assuming all CDs have identical maturity and default risk, the opportunity cost of choosing CD 1 is most accurately described by which of the following?
A
Debt issuances, as they represent a source of capital rather than a use.
B
Share repurchases, which are a use of capital rather than a source.
C
Positive net working capital, which signifies a use of capital rather than a source.