The nominal interest rate in an economy is 5 percent, and there is also a 15 percent probability of having cash lost or stolen in the economy. Given this information, what is the cost of going to the ATM for an individual who spends $10 daily and has a total of holding cash = (365/T) + T. Assume that the individual visits the ATM once in every T days.
A. $3
B. $2
C. $4
D. $1
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