Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 22

Suppose that you have $900 and what to invest the money for one year. There are three existing options.
(a) The city of Rochester is selling bonds at $90 per unit. The bonds pay $100 at the end of one year when they mature (no other cash flows).
(b) Put the money under your mattress.
(c) The one-year interest rate of saving in the Chase Bank is 7 percent.
Which one will you choose What is the opportunity cost of your choice Explain.