Question :

Suppose that, near the end of EDI E, [Morgue buys shares in US Steel at $20 per share, and Monsanto at mm per share. At the end of EMS, the US Steel stock price is $15 and Monsanto is at Sill}. Early in El}! I}, George has to sell some of his stocks to pay his rent. At that point, US Steel is up to $15 per share, and Monsanto has dropped to $110. Based on the results in W [1997], which is he more likely to sell, US Steel or Monsanto? a. Monsanto b.We need more information to answer the question E. US Steel {1. He will sell equal amounts of each Suppose that Ella is an exponential discounter. She claims to be roughly indifferent between gettingil today and 513,3 [iii three years in the future She is then offered a choice between Slit in ve years versus 515.5% in ten years. She will: 3. Take the Slii in 5 years b.Take the 5155 t} in 1t]I years c. We require information on her present bias to answer the question {1. Be roughly indifferent between the tvvo options Consider a quasi-hyperbolic discounter with daily beta=[i.5 and delta=1. He must write a paper sometime in the next at days. Suppose that the cost increases 1.5 times for each day of delay [Lew ifthe cost on day 1 is -1I}, then it will be -15 on day 2, -22.5 on day 3, etc.). if he is naive about his present bias, he will do the task on: a. Day 3 in. Day 4- :2. Day 2 {iDayl in the preceding question ifhe is sophisticated about his present bias he will do the task on: a. Day 3 in. Day 4 {2. Day 1 d. Day 2