Which of the Following Are Early Warning Signs of Financial

question 4

Multiple Choice

Which of the following are early warning signs of financial problems?

• A)Not having an emergency fund.
• B)Living paycheck-to-paycheck.
• C)Charging essentials like gas and groceries with a payday loan.
• D)All of the choices are correct.

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Definitions:

Annual Interest Rate

The percentage of the principal that is paid as interest to the lender over the course of one year, not accounting for compounding.

Value at Risk (VaR)

Measure of downside risk. The loss that will be incurred in the event of an extreme adverse price change with some given, typically low, probability.

Standard Deviation

A statistical measurement that sheds light on historical volatility.

Upper Partial Standard Deviation

A statistical measure focusing on the variability of an investment's returns above the mean, used to assess the risk of higher-than-average returns.