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Your friend promises you a perpetuity of $1 every year, which starts in year 1. However, your friend is an absent-minded guy, paying you $3
Your friend promises you a perpetuity of $1 every year, which starts in year 1. However, your friend is an absent-minded guy, paying you $3 at year 15 but no payment at years 8 and 6. Except for these three years, in other years, the payment is always $1. Which of the following statements is true? Select one: a. your friend is better off for his being absent-minded O b. you are better off for his being absent-minded O c. there is no difference for his being absent-minded O d. no enough information to make decision e. none of the above
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