If the Nominal Interest Rate Is 3 Percent and the Cost

Multiple Choice

If the nominal interest rate is 3 percent and the cost of going to the ATM is $1.50, someone who has a 12 percent probability of having his cash lost or stolen and has a total cost of holding cash equal to (547.50/T) + (0.375 × T) spends _____daily.Assume that the individual visits the ATM once in every T days.

A) $20
B) $15
C) $10
D) $5