Financial Literacy Assignment 6

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1. Think of a real or made up but realistic example of a pure risk that you or someone you know may face, and then answer the questions below. a. Describe the specific risk. (1-3 sentences. 0.5 points) Unemployment. MY step father was unemployed for about 2 years. b. What sort of negative outcomes are possible for this type of risk? (1-3 sentences. 1.0 points) You don’t have any money coming into the home. c. Would this risk be likely to create unexpected expenses? Why or why not? (1-3 sentences. 1.0 points) No, you are just unemployed. Unless you were in an accident or very sick you would have unexpected expenses. d. Describe at least one way you could protect yourself against this risk. (1-3 sentences. 1.0 points) Have money saved up in a savings account, so if anything like unemployment would arise you have money to live on until your unemployed benefits kick in. 2. Think of a real or made up but realistic example of a speculative risk that you or someone you know may face, and then answer the questions below. a. Describe the specific risk. (1-3 sentences. 0.5 points) Accident. My step brother had to have a total hip replacement. b. What sort of negative outcomes are possible for this type of risk? (1-3 sentences. 0.5 points) You cannot get out to get to work because you are down for 6-9 weeks from the surgery. This leads to no income coming in. c. What sorts of positive outcomes are possible for this type of risk? (1-3 sentences. 0.5 points) The positive outcome is that when he is all healed up, he will be able to go get a job, and will have profit in. d. Would this risk be likely to create unexpected expenses? Why or why not? (1-3 sentences. 1.0 points) Yes, you would have a lot of hospital bills, and therapy bills. e. Describe at least one way you could protect yourself against this risk. (1-3 sentences. 1.0 points) The only way to

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