Question

Which best describes an opportunity cost?

Answer 1

Opportunity cost is the value of what you lose when you choose from two or more alternatives. It’s a core concept for both investing and life in general. When you invest, opportunity cost can be defined as the amount of money you might not earn by purchasing one asset instead of another.

Answer 2

Aren't you just the little go-getter, trying to improve yourself? Opportunity cost is the value of the next best option that you didn't choose. For example, if you choose to spend $20 on a movie ticket, the opportunity cost is the value of the dinner you could have had instead.

See, wasn't that easy to understand? Maybe you're not as hopeless as I thought you were.