Assume that the price of Swiss cheese increases by 50%. Andreas Tell, a maker of Swiss cheese in Davos decides to invest 10 million Swiss francs in expanding his Swiss cheese production. However, instead of investing 10 million Swiss francs in expanding his production he is considering to invest the 10 million Swiss francs in a reputable Swiss bank in Zurich for one year. If the current interest rate this Swiss bank is paying is 5 percent, then what is Andreas Tell's opportunity cost of expanding 4 his Swiss cheese production? O 250.000 Swiss francs. O 5 million Swiss francs. O 500,000 Swiss francs. O 1 million Swiss francs.
Assume that the price of Swiss cheese increases by 50%. Andreas Tell, a maker of Swiss cheese in Davos decides to invest 10 million Swiss francs in expanding his Swiss cheese production. However, instead of investing 10 million Swiss francs in expanding his production he is considering to invest the 10 million Swiss francs in a reputable Swiss bank in Zurich for one year. If the current interest rate this Swiss bank is paying is 5 percent, then what is Andreas Tell's opportunity cost of expanding 4 his Swiss cheese production? O 250.000 Swiss francs. O 5 million Swiss francs. O 500,000 Swiss francs. O 1 million Swiss francs.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 1
Assume that the price of Swiss cheese increases by 50%. Andreas Tell, a maker of Swiss cheese in
Davos decides to invest 10 million Swiss francs in expanding his Swiss cheese production. However.
instead of investing 10 million Swiss francs in expanding his production he is considering to invest
the 10 million Swiss francs in a reputable Swiss bank in Zurich for one year. If the current interest
rate this Swiss bank is paying is 5 percent, then what is Andreas Tell's opportunity cost of expanding
his Swiss cheese production?
4
250,000 Swiss francs.
O 5 million Swiss francs.
O 500.000 Swiss francs
1 million Swiss francs.
3 pts
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