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100
Portfolios 104:
Building an Emergency Fund
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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Review your answers below to learn more.
1.
A retirement account is not a good candidate to hold an emergency fund.
Choose wisely. There is only one correct answer.
True
False
True. Retirement accounts require years to build up. When you take money out now, you can lose a lot of growth in future years.
2.
An advantage to using an automatic savings account to build an emergency fund is that it _______.
Choose wisely. There is only one correct answer.
Saves you time and energy on finding money to save
Always earns more than any other account
There are no advantages to automatic savings account
Saves you time and energy on finding money to save. Putting your saving on automatic can free up time for other financial planning.
3.
You will likely need an emergency fund most when you're not financially stable.
Choose wisely. There is only one correct answer.
True
False
True. People who are just starting out are usually most in need of such a fund.
4.
Why are stocks not considered a good parking place for emergency funds?
Choose wisely. There is only one correct answer.
Stocks always lose value
The stock market is volatile
Stocks actually are the best place to park your emergency money
You can't get your money out of stocks in time to use it
The stock market is volatile. It is possible for the price of your stock to be down when you need the money to cover an emergency expense.
5.
Treating your emergency fund as a bill to be paid gives it an element of priority.
Choose wisely. There is only one correct answer.
True
False
True. Usually, we can find money to pay our bills.
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DONE