=+5. Dave and Christy both follow the life-cycle hypothesis: they smooth consumption as much as possible. They each live for fi ve periods, the last two of which are retirement. Here are their incomes earned during each period:

Period Dave Christy 1 $100,000 $40,000 2 100,000 100,000 3 100,000 160,000 4 0 0 5 0 0