3. One of the celebrated hypotheses in consumption research is the Random Walk theory, which advances that E(C-11%) = C, that is that consumption tomorrow is, on average, what consumption is today. More generally, the theory allows for a "drift term anchored in further consumer behaviour: E(C-1) = (r-Y) + C, where ris the real interest rate, i.e., the opportunity cost of C, and typically assumed constant, and y is something called the rate of time preference, a measure of consumer impatience. If r >y, then financial market returns more than offset inherent consumer desires to save less and consume more in the current; if r y, then financial market returns more than offset inherent consumer desires to save less and consume more in the current; if r