In order to protect principal against possible loss caused by distressed selling,individuals are typically recommended to have a
A)1-month emergency fund.
B)2-month emergency fund.
C)6-month emergency fund.
D)9-month emergency fund

Question

Quizplus · Accepted Answer

A 6-month emergency fund is typically recommended to cover living expenses in case of unexpected job loss or other financial emergencies. This fund not only helps to protect against distressed selling of investments, but also provides a safety net for other unexpected expenses. While a 1 or 2-month emergency fund may be better than no emergency fund at all, they may not provide enough coverage for more significant financial setbacks. A 9-month emergency fund may be overly cautious for some individuals and tying up too much money in low-earning savings accounts.

In Order to Protect Principal Against Possible Loss Caused by Distressed