Some Argue That "Financing an Investment with Your Own Personal

Multiple Choice

Some argue that "financing an investment with your own personal funds is always less expensive than borrowing the funds from a bank because it's an interest-free loan." To an economist, this argument

A) is true because borrowed funds involve an explicit cost, while use of one's own funds involves only an implicit cost
B) ignores the opportunity cost associated with using one's own funds
C) is false because the bank can always match the interest rate offered on the loanable funds market
D) is true only if the investment generates less revenue than the revenue generated by the interest-bearing deposit in the bank
E) ignores the cost of sacrificing present consumption