Question

Using the amount of his current paycheck, Miguel created a series of financial goals and strategies. Which type of financial risk might this cause for him in the future?


income risk


interest rate risk


personal risk


inflation risk

Answer 1

Income risk.

By basing goals and strategies on his current paycheck, Miguel is exposed to the possibility that his future income could change (job loss, reduced hours, pay cuts, or career changes), which would make those plans unrealistic.