MANAGEMENT

Detailed explanation-1: -The life-cycle hypothesis (LCH) is an economic theory that describes the spending and saving habits of people over the course of a lifetime. The theory states that individuals seek to smooth consumption throughout their lifetime by borrowing when their income is low and saving when their income is high.

Detailed explanation-2: -The life cycle hypothesis argued that people seek to maintain roughly the same level of consumption throughout their lifetimes by taking on debt or liquidating assets early and late in life (when their income is low) and saving during their prime earning years when their income is high.

Detailed explanation-3: -There are four stages to an individual’s financial lifecycle. There is the accumulation of wealth, growing or managing wealth, preserving and protecting wealth, and transferring wealth.