Which of the following statement about emergency funds is NOT correct? A. Emergency funds amount varies...

Which of the following statement about emergency funds is NOT correct?

	A.	Emergency funds amount varies with income sources
	B.	Emergency funds amount varies with the potential for financial emergencies
	C.	Emergency funds amount varies with the stability of income
	D.	Emergency funds decision is independent from insurance coverage decision

Solutions

Expert Solution

Option 4 is the Correct

Emergency funds is the funds that an individual kept aside for any unforseen circumstances that may arise in future and for any goals that he has set. For example: Purchasing a Car, Payment due to soneone.

Emergency funds help the individulal to reduces the cost of finance, Meet the obligations and improve the financial stability. Emergency funds amount do varies with inocme sources and stability of funds, If the Income sources are stable then he will deposit more money while Instability in income sources will lead to instability in emergency funds also.

Emergency funds decision is not independent from insurance coverage decision. It depends on the insurace coverage as if the insurance coverage is more than the individual might save less money in emergency funds because of the assurance from the insurance while less insurance coverage will lead to more funds in insurance coverage. So, Option 4 should be the correct answer.

jeff jeffy answered 1 year ago

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