Question

What does opportunities costs mean and how does this relate to the decisions that we make with investments? What is the opportunity costs of your decision to earn your college degree?

Answer 1

1opportunity cost refers to the cost of a foregone alternative ie if we choose one option from another then the cost of choosing that particular alternative becomes opportunity cost.

2 Opportunity cost is often considered as a benefit for taking the correct finncial decision.If we take the decision of chosing the wrong alternative .it will affect our financial status.

3 Sometimes the decision to chose the correct alternative is complexespecially when we have to compare two different interest rates on investments.in the case of earning a college degree you need to invest money as fees but at the end of the course you are gettig a valid degree which has lifelong validity .In the future you will get the returns as wages ,once you start work.