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Opportunity cost

• The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. The performance differential is a consequence of not being able to implement all desired trades. Most valuable alternative that is given up.

• Cash flows that could be realized from the best alternative use of an owned asset.

• The cost of pursuing one course of action measured in terms of the foregone return offered by the most attractive alternative.

 
 

Follow this link for all the terms related to cost.

 
 Embedded terms in definition
 Asset
Cash flow
Cash
Execution costs
Execution
Fixed cost
Return
 
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