Let $\delta^{t-t^{\prime}}$ be the discount factor between $t$ and $t^{\prime}$, where $tt^{\prime}$. Stationarity implies which of the following must be true? A) $\delta^{200-191}\delta^{109-100}$ D) $\delta^{200-191}=\delta^{109-100}$

Question

Let $\delta^{t-t^{\prime}}$ be the discount factor between $t$ and $t^{\prime}$, where $t>t^{\prime}$. Stationarity implies which of the following must be true?
A) $\delta^{200-191}<\delta^{109-100}$
B) $\delta^{200-191}=\delta^{110-100}$
C) $\delta^{200-191}>\delta^{109-100}$
D) $\delta^{200-191}=\delta^{109-100}$

Quizplus · Accepted Answer

Stationarity implies that the discount factor depends only on the difference $t-t^{\prime}$, not on the specific values of $t$ and $t^{\prime}$. Therefore, $\delta^{200-191} = \delta^{109-100}$.

Let δt−t′\delta^{t-t^{\prime}}δt−t′ Be the Discount Factor Between ttt And t′t^{\prime}t′ , Where t>t′t>t^{\prime}t>t′ Stationarity Implies Which of the Following Must Be True

Let $\delta^{t-t^{\prime}}$ Be the Discount Factor Between $t$ And $t^{\prime}$ , Where $t>t^{\prime}$ Stationarity Implies Which of the Following Must Be True