The Main Reason People Save During Their Working Years Is

question 91

Multiple Choice

The main reason people save during their working years is:

• A) a preference toward a smooth consumption path over time.
• B) a high time preference for the present.
• C) an expectation that they will die early.
• D) a preference toward matching income with spending over time.

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Definitions:

Interest Payments

Interest payments are the regular payments made to a lender by a borrower for the use of borrowed money, typically calculated as a percentage of the principal.

Principal

The original sum of money borrowed in a loan or the initial amount of investment, exclusive of any interest or dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.

Bond Ratings

Assessments made by credit rating agencies on the creditworthiness of corporate or governmental bonds, impacting the interest rates offered.