A person has $200,000 to invest. They can invest in Stock X, which is expected to return 8% per year, or Stock Y, which is expected to return 12% per year. They choose to invest in Stock X because it is less risky. What is the opportunity cost of choosing Stock X over Stock Y after one year?

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26-06-2024
Business

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A person has $200,000 to invest. They can invest in Stock X, which is expected to return 8% per year, or Stock Y, which is expected to return 12% per year. They choose to invest in Stock X because it is less risky. What is the opportunity cost of choosing Stock X over Stock Y after one year?

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