Question

Which of the following is a good reason to have a financial reserve that's larger than normal? (Select the best answer.) a. Your income is fairly predictable. b. You have mostly discretionary expenses. c. You have a large monthly car payment. d. You would be able to find another job quickly if you lost yours.

Answer 1

Answer:

C- you have a large monthly car payment

Explanation:

Financial reserve of an individual is the money an individual keeps to be able to cater to short-term and emergency needs.

Short-term investments are important for financial reserve because it helps individuals to recover thier money back even though it may produce low rates. Having significant cash reserves gives an individual the ability to make a large purchase while having reserve to cater for other pressing bills immediately. Individuals are advice to have financial reserve especially when they are constantly paying large monthly bills so as not to affect thier primal needs eg an individual having large monthly car payments should have enough reserve to pay for his car and also for his needs because it can come in handy when there financial problems and money is required for something immediately.