What is the term for the cost associated with not investing cash balances when they are held instead of used?

Money Markets MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Money Marketsfinance-mcqs › money-markets
Published
12 May 2023
Last updated
28 May 2026

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Explanation

The amount lost by not utilizing cash balances for other profitable uses is known as the opportunity cost. It reflects the potential benefits foregone when choosing one alternative over another.

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