A Person Is Dynamically Consistent If

question 17

Multiple Choice

A person is dynamically consistent if

• A) His preferences over the alternatives available at some future date change as the date approaches or once it arrives
• B) His preferences over the alternatives available at some future date do not change as the date approaches or once it arrives
• C) He always does not want to follow through on his plans and intentions
• D) He always chooses the same product

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Definitions:

Settlement Date

The date on which a trade is finalized and the buyer must make payment and the seller deliver the asset.

Forward Rate

Refers to the agreed exchange rate for a currency transaction that will occur at a future date.

Exchange Gain

A profit resulting from holding foreign currencies that appreciate against the home currency.

Financial Statements

Official records of the financial activities and position of a business, person, or other entity, presented in a structured manner.