Opportunity Cost of Capital

Consider a portfolio manager whose mission is to maximize annual returns through equity investments in the single-family homebuilding industry. Which is the best opportunity cost investment for this manager? Note: As in the real world, its probable that none of the options are perfect. Choose the best available option.

a. The SPY exchange-traded fund, which very closely matches the returns of the S&P 500 stock market index.

b. Blackstone's Single Family Housing mutual fund, which makes money by purchasing a large number of homes and renting them to families. -- this answer is wrong

c. A mutual fund that invests in multi-family rental REITs, such as Post Properties and HMO.

d. An exchange-traded fund that owns stock in companies such as DR Horton, Lennar, and NVR, Inc. (Hint: look up these companies on the Internet).