Why Don't Many Young People Begin Saving for Retirement Once

question 21

Multiple Choice

Why don't many young people begin saving for retirement once they begin working?

• A)Sound financial planning advises against such savings.
• B)These savings are much less "high powered" for accumulation purposes.
• C)Young people prefer enjoyment today over what they perceive as a distant concern about retirement.
• D)All of the above.
• E)None of the above.

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Definitions:

Market Risk Premium

The extra return investors demand for taking the risk of investing in stocks over a risk-free asset.

Common Stock

A form of shares in a corporation that grants the owner voting privileges and entitlement to a portion of the corporation's earnings via dividends.

Yield to Maturity

The total return anticipated on a bond if the bond is held until its maturity date, accounting for interest payments and capital gain or loss.

Zero Coupon Bonds

Bonds that do not pay interest during their lifetime but are issued at a discount and redeemed at face value at maturity.