#11

Elinore is asked to invest $5,000 in a friend's business with the promise that the friend will repay $5,500 in one year's time. Elinor finds her best altemative to this investment, with similar risk, it one that will pav her $5,450 in one vear's time. U.S. securitios of similar term offor a rate of retum of 7%

What is the opportunity cost of capital in (his case?

A. 11%

B. 10%

c.7%

D. 9%