Ed's Monthly Starting Balance Is $3,000

Ed's monthly starting balance is $3,000.Ed spends $100 per day.Initially,Ed keeps all of his income in a non-interest-bearing checking account.Ed decided to change his strategy and at the beginning of each month he deposits one-third of his income into his checking account and buys two bonds with the remainder of his income.After 10 days he cashes in one bond and 10 days after that he cashes in the other bond.Which of the following statements is TRUE?

A) If Ed uses either strategy,his average monthly balance is $1,500.
B) The second strategy involves lower money management costs because Ed now earns interest on the bonds he has purchased.
C) Ed's optimal money balance is $100.
D) If the interest rate paid on bonds decreases,the opportunity cost of Ed's original strategy is reduced.