Consider three students Ben, Jeff and Lennart. Ben is indifferent between $1000 today for $1100 in one year. Jeff is indifferent between $1000 today for $1200 in one year. Lennart is indifferent between $1000 today and $1250 in one year. Which of the following statements is correct?
A) Lennart is the least present biased among the three.
B) Jeff is the most present biased among the three.
C) Ben's implicit discount factor (beta*delta) is approx. 0.91.
D) Lennart's implicit discount factor (beta*delta) is approx. 0.91.
Correct Answer:
Verified
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