Which of the Following Is an Example of the Life-Cycle

question 48

Multiple Choice

Which of the following is an example of the life-cycle motive for saving?

• A)Pat puts $400 per month in his 401(k)retirement account.
• B)Jordan sets aside $200 per month in case she has to pay for a new roof for her house.
• C)Gerry and Terry put $2,000,000 in a trust fund that will go to their children when they die.
• D)Chris keeps $15,000 in a money market account to pay expenses in case he loses his job.

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Definitions:

Tenants

Tenants are individuals or entities that occupy land or property rented from a landlord under a lease agreement.

Landlords

Property owners who lease their real estate to tenants for a specified time in exchange for regular payments, typically bound by local real estate laws.

Obligors

Parties who are legally obligated to fulfill a duty or repay a debt.

Obligees

Parties to a contract or legal agreement who are entitled to receive a performance or benefit from the obligors.