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Evaluate the following statements. True/False/lt Depends? Explain your answers briefly. I a.Under perfect capital markets, investor's choice between alternative income streams depends only on their
Evaluate the following statements. True/False/lt Depends? Explain your answers briefly. I a.Under perfect capital markets, investor's choice between alternative income streams depends only on their net present values. b.Under imperfect capital markets, a person's time preference does not affect whether or not they invest in a business project. e Consider two investors, A and B, where A is the more patient of the two (i.e., A's utility function puts greater weight on future consumption). Statement to evaluate: "If an interest rate increase makes B better off, it will necessarily also make A better off." a Real-world financial markets are not perfect: Interest rates on loans tend to be greater than those on deposits. Why? Briefly present two real world reasons. e Imagine person X whose income stream is entirely front-loaded (say, in a two- period world, all income comes in first period and none of it in second). Statement to svaluate: "Person X does not care whether financial markets are perfect or imperfect
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