The opportunity cost of holding money in cash/demand deposits rather than interest-bearing bonds is measured by the:

Cash and ordinary demand deposits earn little or no interest, whereas a bond earns the nominal rate of interest i. A person who holds ₹1 in cash instead of in bonds gives up i of interest income. This forgone interest is the opportunity cost of holding money, and it is why the demand for money is written as L(i, Y), a decreasing function of the nominal interest rate. This is the basis of Keynes’s liquidity preference theory. The real interest rate (r = i - π) is not the correct measure. It gives the return from holding bonds in terms of goods, and it does not measure the cost of holding money instead of bonds. Options (C), (D) and (E) have no connection with the cost of holding money. Hence the correct option is (B).