Question

Characteristics of sound financial planning are

• A. Simplicity
• B. Liquidity
• C. Economicality
• D. All of these

Hint:

For effective financial planning, aim for simplicity, ensure liquidity, and always look for economical solutions.

Answer 1

The Correct Option is D

Step 1: Understanding financial planning characteristics.
A sound financial plan must be simple to understand and execute, maintain liquidity to meet short-term obligations, and be economical in its approach to minimize unnecessary expenses while maximizing efficiency.
Step 2: Analyzing the options.
(A) Simplicity: This is true. A good financial plan should be simple to follow and implement.
(B) Liquidity: This is true. A financial plan should ensure there is enough liquidity to handle daily operations and unexpected expenses.
(C) Economicality: This is true. The plan should minimize costs and focus on efficiency.
(D) All of these: Correct. All of these characteristics are essential for sound financial planning.
Step 3: Conclusion.
The correct answer is (D) All of these, as simplicity, liquidity, and economicality are all vital characteristics of good financial planning.