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Financial Planner

Category - General Principles of Financial Planning

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What, of the following, is the best way to fund a client’s emergency fund?

Real estate investments
Stock investments
Savings account
Business investments

Explanation

Answer: C - While investments in other areas are ways to create and grow a client’s overall portfolio, an emergency fund should be funded in a way that the client can easily obtain the funds if needed. Real estate, stock, and business investments must be sold in order to use the funds, and that can take time. Begin emergency funds in a bank or money market account where the funds can be easily liquidated and used.

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