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Basics Beginner: Financing a Major Purchase

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1.
Using a growth investment to build up money for a major purchase is most appropriate for a _______ time horizon.
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Long. Although it is possible to profit from growth investments in the short term, they tend to fluctuate in value. Keeping them for the long term can smooth out those fluctuations.
2.
A home equity line of credit is typically a revolving line of credit.
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True. HELOCs, as they are called, can be used to finance large purchases.
3.
Most experts recommend that an emergency fund have how many months worth of living expenses in it?
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Three to six. This is just a recommendation, however.
4.
A major purchase is a _______ expense.
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Variable. It is variable because you dont normally buy it on a regular basis.
5.
Which of the following statements is true?
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A money market fund is a good savings vehicle for a major purchase. Money market funds are safe, conservative investments that can be accessed quickly, using a check. All of the other answers are false.