Question

1. Which is an example of a savings instrument?
A. certificate of deposit (CD)
B. checking account
C. cash
D. credit card

2. You need to have an emergency fund that can cover _____ months of your fixed expenses.
A. 1 to 3
B. 4 to 5
C. 3 to 6
D. 5 to 7

Answer 1

A. certificate of deposit (CD)

A certificate of deposit (CD) is a time deposit, a commercial product generally contracted in the United States and abroad by banks, economic institutions, and credit unions. CDs are comparable to savings records in that they are guaranteed "money in the bank" and thus essentially risk-free.

D. 5 to 7

Your emergency savings capital should be adequate to cover your major expenditures for five to seven months. Your contingency fund should hold savings for home expenses such as rent or debt, property taxes, security, and services.

Answer 2

1. The example of the saving instrument is A. certificate of deposit (CD)

2. The emergency fund can cover 5 to 7 months of the fixed expense.

Example of Saving instrument & number of months for fixed expenses. :

A certificate of deposit (CD) refers to the time deposit that is contracted in the United States and abroad by banks, economic institutions. CDs should be comparable to savings records. Your emergency savings capital should be enough to cover the major expenditures for five to seven months.

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