14
practice examMultiple Choice

Practice Exam

Question 14 • Personal Finance

Emma has decided that she needs to assess the risk and return of buying an extended warranty for her new laptop for school. Which of these practical questions should she ask herself to assess the risk? Choose three correct answers.

Answer
A
Is the cost of replacement less than the cost of the warranty?
B
Would it be better for me to buy a desktop computer?
C
Is the laptop worth the extra expense of the warranty?
D
Should I buy a different model?
E
Will the warranty cover the cost of any physical damage?

Explanation

To assess the warranty’s risk and return, Emma should consider whether its cost is worthwhile, compare that cost with the cost of replacing the laptop, and check what losses the warranty would actually cover. These are the practical questions in A, C, and D. Choosing a different laptop model or buying a desktop, as in B and E, does not directly assess the risk of this warranty.

AI-written and checked against the verified answer.

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