Question

Barry gets hurt at work and must go on disabililty for 4 months. On disability, the pay that Barry receives is 60% of his normal net pay. Barry should be fine if he has a plan for _____. a. financing b. managing his investments c. managing his liquidity d. protecting his assets

Answer 1

Answer: c. Managing his liquidity

Explanation:

Barry will be getting less money than he is used to and so will need to manage his lifestyle in a way that he can maintain himself with this reduced cashflow.

The way to do this is to manage his liquidity. Liquidity refers to the flow of cash and so managing it refers to adopting strategies and methods that will enable a person use the money they have in such a way that it meets their obligations with the amount that they have.

If Barry has such strategies and methods he can survive the reduction in his income till he is back off disability.