Watch the “Managing Money with Life Cycle Theory” video of the “Money Management” Great Course below and complete the quiz. You may wish to consider keeping the quiz open as you watch the video.
https://wcu.kanopy.com/video/managing-money-life-cycle-theory (Links to an external site.)
Question 1
What is the first assumption of life cycle theory?
Diminishing marginal utility
Lifespan of less than 100 years
Consistent income for life
Client is under 40 when they begin their plan
Question 2
Fill in the BLANK: You should think of borrowing and saving not as bad or good but about what it actually is – a _____________ across our lifetime” (three words).
Question 3
Fill in the BLANK: Neither a borrower nor a lender be? Life cycle theory says that you should be _________.
Question 4
Fill in the BLANK: We borrow and lend using ________ instruments.
Question 5
Fill in the BLANK: If I get more ________ from spending [my money] when I’m 70, then I’ve made a good decision by [saving] that money… today
Question 6
Fill in the BLANK: The satisfaction of retirees actually begins to go down after about $____ million of wealth. (enter just a number, with no dollar signs, periods, commas, etc)
Question 7
According to life cycle theory, how do you win the game of life?
By living it up
By saving the most
By getting good value from every purchase
By maximizing returns while minimizing risks
