Questions: Which of the following is not true of unforeseen expenses?

Transcript text: Which of the following is not true of unforeseen expenses?

Solution

Answer

The answer is: They rarely occur during retirement.

Explanation

Option 1: They may come in the form of higher than expected prices for goods and services.

This statement is true. Unforeseen expenses can arise when the prices of goods and services increase unexpectedly, leading to higher costs than initially planned.

Option 2: They can require the use of an emergency fund.

This statement is true. One of the primary purposes of an emergency fund is to cover unforeseen expenses, ensuring that individuals have a financial buffer in unexpected situations.

Option 3: They rarely occur during retirement.

This statement is not true. Unforeseen expenses can occur at any stage of life, including retirement. Retirees may face unexpected medical expenses, home repairs, or other financial surprises.

Option 4: They can occur while you are living a tranquil life.

This statement is true. Unforeseen expenses can happen regardless of one's lifestyle or perceived tranquility, as unexpected events can disrupt even the most peaceful situations.

Option 5: They may be higher than imagined due to inflation.

This statement is true. Inflation can lead to an increase in the cost of goods and services, making unforeseen expenses higher than initially anticipated.

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