What term best describes the cost of forgoing alternatives when making a financial decision?

The term that best describes the cost of forgoing alternatives when making a financial decision is opportunity cost. This concept refers to the potential benefits one misses out on when choosing one option over another. In financial decision-making, it emphasizes the value of the next best alternative that is not chosen. Recognizing opportunity costs helps individuals and businesses evaluate the true cost of their choices and make more informed decisions regarding investments, consumption, or other financial matters.

The other terms presented do not adequately capture this idea. Trade-debt focuses on the obligations incurred from trading in financial markets, investment return pertains to the gains derived from investments, and capital loss refers to a loss incurred when an asset is sold for less than its purchase price. Thus, these terms do not convey the broader concept of evaluating alternatives that opportunity cost encapsulates.