There are two different types of investors. There is type A, who wants to methodically save for the future, and then there is B, who would prefer to spend all his money on random adventures, without thinking about tomorrow. Suppose that both have a savings of exactly $100,000 in cash. B chooses to spend all of it today, while A prefers to invest it in the financial market. Both have access to a well functioning, competitive financial market, in which they can borrow and lend at 20% interest rate.

Suppose that A and B are offered the opportunity to invest their $100,000 in a new business that a fellow friend is founding. This will produce a one-off surefire payment of $111,000 next year.

Select all the correct answers:

a. A would lend, consume 0 today and $120,000 next year

b. G would borrow, consume $111,00 today and 0 next year

c. A would lend, consume 0 today and $111,000 next year

d. G would borrow, consume $105,714 today and 0 next year

e. G would borrow, consume $100,000 today and 0 next year