Question

Select the correct answer.

Why is it important for a rainy-day fund to be highly liquid?

A. Funds need to earn a high rate of return.

OB.

Funds need to be easily accessible.

O c.

Funds need to be cured in a safe place.

OD. Funds need to be invested to achieve long-term savings goals.

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Answer 1

B. Funds need to be easily accessible.

Explanation:

We need to understand what is "rainy day", it is an idiom we use to describe a unexpected difficult situation that may happen, that is why we need to "save for a rainy day"

It important for a rainy-day fund to be highly liquid, it is an financial concept, the degree to which an asset can be bought or sold in the market without significantly affecting its market price such as cash, gold, CD... Which means the asset must be easy to access.

So in a rainy day, we need to response as soon as possible to handle the difficulty.

Hope it will find you well.