What is the opportunity cost of holding money rather than some other financial asset?
A) forgone interest income
B) forgone utility
C) forgone leisure
D) forgone profit

Question

What is the opportunity cost of holding money rather than some other financial asset?  
A) forgone interest income 
B) forgone utility 
C) forgone leisure 
D) forgone profit

Quizplus · Accepted Answer

The opportunity cost of holding money is the forgone interest income that could have been earned if the money had been invested in some other financial asset. Holding money does not generate any interest income, so the opportunity to earn a return on the money is lost.

What Is the Opportunity Cost of Holding Money Rather Than