The concept of time preference in ﬁnancial investing rests on the belief that people
A) are indifferent between present and future consumption.
B) are patient.
C) are impatient.
D) intentionally consume 50 percent of assets in the present and 50 percent in the future.

Question

Quizplus · Accepted Answer

The concept of time preference assumes that people are not indifferent between present and future consumption and are either patient or impatient. Choice A is incorrect because it assumes that people are equally interested in present and future consumption. Choice B is partially correct, but it doesn't account for the possibility that some people may be impatient and prefer present consumption. Choice D is incorrect because it assumes that people consume exactly half of their assets in the present and future, which is not necessarily true for all investors.

The Concept of Time Preference in ﬁNancial Investing Rests on the Belief