If the cost of going to the ATM in an economy is $1 and the nominal interest rate is 5 percent, someone who spends $10 each day and has the total cost of holding cash = (365/T) + T, has a ____ probability of having his cash lost or stolen. Assume that the individual visits the ATM once in every T days.
A. 5 percent
B. 10 percent
C. 15 percent
D. 20 percent
Answer: C
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