CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Robert withdrew $100,000 from an account that paid 10 percent annual interest and used the funds to purchase real estate. After one year he sold the property for $120,000. According to an economist, Robert's profit on this deal was ______.
A. $120,000
B. $20,000
C. $10,000
Explanation: The opportunity cost of $10,000 (foregone interest) must be included to determine economic profit.

User Contributed Comments 1

User Comment
choas69 oh shyt
so according to economist means the economic profit which is
profit minus explicit and implicit costs
120(profit) - 100(explicit cost) - 10(frogone interest - emplicit cost) = 10
iam surprised at my mistakes.!
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