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suppose that you can choose between stock, real state , and bonds and the bond will gain $150
over the next year. the opportunity cost of buying stocks would remain $900 and the economic
profit would still be $100
(a)Draw a decision tree illustrating this decision problem.
(b) What is the opportunity cost of buying real estate?
(c) What is the opportunity cost of buying bonds?

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suppose that you can choose between stock, real state , and bonds an.pdf

  • 1. suppose that you can choose between stock, real state , and bonds and the bond will gain $150 over the next year. the opportunity cost of buying stocks would remain $900 and the economic profit would still be $100 (a)Draw a decision tree illustrating this decision problem. (b) What is the opportunity cost of buying real estate? (c) What is the opportunity cost of buying bonds?