Many Financial Experts Advise That You Set Up a Contingency

question 122

Multiple Choice

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

• A) two months
• B) six months
• C) one year
• D) three years

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Definitions:

Expected Value

The weighted average of all possible values of a random variable, with weights being their probabilities.

Average Temperature

The mean value of temperature taken over a specified period of time, used to describe climate or weather conditions.

Standard Deviation

A quantitative indicator that calculates the degree of spread or variability among a collection of data points.

Expected Rate

The anticipated return on an investment over a specific period.