Mutually exclusive investment decisions

Mutually exclusive investment decisions

Investment decisions in which the acceptance of a project precludes the acceptance of one or more alternative projects.

Mutually Exclusive Investment Decision

The decision to make an investment that prevents making a different investment. Some investment decisions are mutually exclusive by nature; for example taking a long position in a stock precludes taking a short position the same stock at the same time. Others are mutually exclusive circumstantially; for example, if one only has so much money to invest and buys stocks A, B, and C, there may not be enough left over to buy stock D. See also: Opportunity cost.
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