Many financial planning experts recommend keeping a minimum of ____ to _____ of your investment portfolio in savings-type instruments in addition t the 3 to 6 months of liquid reserves noted earlier. Someone with $50,000 in investment should probably have a minimum of $5000 to $12500.
Click on the arrows to vote for the correct answer
A. B. C. D.C
The question pertains to the recommendation made by financial planning experts on the minimum amount of savings-type instruments that should be held in an investment portfolio. The recommended amount is in addition to the 3 to 6 months of liquid reserves that experts recommend individuals to maintain as an emergency fund.
According to the question, someone with a $50,000 investment portfolio should hold a minimum of $5,000 to $12,500 in savings-type instruments.
Let's examine the answer options:
A. 10% to 15%: This option suggests that the minimum amount of savings-type instruments in an investment portfolio should be between 10% to 15% of the total portfolio value. Using the given example, 10% of $50,000 is $5,000, which is the lower end of the recommended range. 15% of $50,000 is $7,500, which falls short of the upper end of the recommended range ($12,500).
B. 20% to 30%: This option suggests that the minimum amount of savings-type instruments in an investment portfolio should be between 20% to 30% of the total portfolio value. Using the given example, 20% of $50,000 is $10,000, which falls within the recommended range. 30% of $50,000 is $15,000, which exceeds the upper end of the recommended range.
C. 10% to 25%: This option suggests that the minimum amount of savings-type instruments in an investment portfolio should be between 10% to 25% of the total portfolio value. Using the given example, 10% of $50,000 is $5,000, which is the lower end of the recommended range. 25% of $50,000 is $12,500, which is the upper end of the recommended range.
D. 20% to 25%: This option suggests that the minimum amount of savings-type instruments in an investment portfolio should be between 20% to 25% of the total portfolio value. Using the given example, 20% of $50,000 is $10,000, which falls within the recommended range. 25% of $50,000 is $12,500, which is the upper end of the recommended range.
Therefore, options C and D are the closest to the recommended range of $5,000 to $12,500 for someone with a $50,000 investment portfolio. Option C has a slightly wider range and includes the lower end of the recommended range, making it the most accurate answer. Therefore, the correct answer is option C, which states that financial planning experts recommend keeping a minimum of 10% to 25% of the investment portfolio in savings-type instruments in addition to the 3 to 6 months of liquid reserves.