Investment basics · Question 7 of 12
What is a cash reserve in an account for, alongside an equity investment?
1 answer is correct. Easy
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Answer
- A So that shares need not be sold at a bad time because of unexpected expenses
Explanation
A reserve covering several months of expenses covers emergencies such as a repair or a gap in income. This way, shares do not have to be sold when prices happen to be low. The reserve should be safe and quickly available.