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

Understand the components that constitute investment in economic terms.

Identify factors that contribute to the efficiency of goods and service production in the U.S.

Recognize the significance of corporations in the U.S. economy and the concepts of ownership and control.

Understand the concepts of primary and secondary appraisal in stress analysis.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Note Payable

A written agreement where one party promises to pay another a definite sum of money at a specified future date or on demand.

Current Assets

Assets likely to be converted into cash within a year, such as inventory, accounts receivable, and cash and cash equivalents.

Current Liabilities

Short-term financial obligations that are due within one year or within the operating cycle.