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Mary Has $1,000 and Is Considering Purchasing a $1,000 Bond

Question 10

Multiple Choice

Mary has $1,000 and is considering purchasing a $1,000 bond that pays 7 percent interest per year.Mary decides not to buy the bond and holds the $1,000 as cash.If the inflation rate is 4 percent, the opportunity cost of holding the $1,000 as money is


A) $30.00.
B) $40.00.
C) $70.00.
D) $110.00.
E) $100.00.

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