Which of the Following Short-Term Goals Is Stated Most Clearly

question 11

Multiple Choice

Which of the following short-term goals is stated most clearly?

• A)Buy a car for less than $17,000 within 6 months
• B)Retire in 10 years at age 65 with $2,000,000 in my 401(k)account
• C)Purchase a house with a mortgage no greater than $150,000 within 5 years
• D)Set up an emergency fund
• E)Invest $50 per month for the next 18 years for my nephew's college fund

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out.

Checkable Deposits

Bank account balances that can be easily withdrawn or used for payments through checks, debit cards, or electronic transfers.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over others.

Transaction Costs

Expenses incurred when buying or selling goods or services, including fees, taxes, and other charges that make up the total cost of a transaction besides the price of the good or service itself.