asked 177k views
5 votes
Which scenario does not strengthen your financial security?

asked
User Chamil
by
7.3k points

1 Answer

2 votes

Final answer:

The scenario where unexpected expenses lead to depleted savings, the persistence of a poverty trap due to extra costs and lack of work experience, and high-risk investments impacted by exchange rate changes are situations that do not strengthen financial security.

Step-by-step explanation:

The scenario that does not strengthen your financial security is the one where a series of unfortunate events depletes your savings, such as unexpected car repairs, house damage from a natural disaster, and medical expenses that are only partially covered by insurance. In this situation, even with a well-planned household budget and emergency savings, financial stability is compromised due to the sudden and significant expenses. Moreover, the poverty trap is an example of a circumstance that perpetuates financial insecurity; working individuals with extra expenses like clothing, transportation, and child care find their economic gains reduced, while a lack of work experience and contacts may lead to diminished future employment prospects. Lastly, high-risk investments can be detrimental to an investment portfolio, especially when a weakened exchange rate adversely affects international borrowing outcomes, as depicted in various figures.

answered
User MADHAIYAN M
by
8.3k points

No related questions found

Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.