Evaluate the following statements True False It Depends Explain your answers briefly 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 B Imagine person X whose income stream is entirely front loaded (say, in a twoperiod world, all income comes in first period and none of it in second) Statement to evaluate Person X does not care whether financial markets are perfect or imperfect

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Question: Evaluate the following statements.True/False/It Depends? Explain your answers briefly A] Real-world financial markets are not perfect: Interest rates on loans tend to be greater than

Evaluate the following statements.True/False/It Depends? Explain your answers briefly

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.

Imagine person X whose income stream is entirely front-loaded (say, in a twoperiod world, all income comes in first period and none of it in second). Statement to evaluate: "Person X does not care whether financial markets are perfect or imperfect".

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