Question

Which of the following is a good reason to have a financial reserve that's larger than normal? A. You would be able to find another job quickly if you lost yours. B. You have a large monthly car payment. C. You have mostly discretionary expenses. D. Your income is fairly predictable.

Answer 1

Answer:

B. You have a large monthly car payment.

Explanation:

A large financial reserve refers to having an important amount of money saved for unexpected things, a big expense or emergencies. So, from the options given the one that would be a good reason to have a financial reserve that is larger than normal is to have a large monthly car payment as this could mean that it represents a big portion of your earnings which could put you in trouble to cover it and having an important amount of money saved can help you to cover this cost and avoid not being able to pay it.

The other options don't apply because having a big amount of money is not going to help you find another job and if you don't have a lot of expenses and your income is predictable you don't need a large financial reserve.

Answer 2

Hey there!

It's a good reason to have a financial reserve that's larger than normal if you have a large monthly car payment