2. Elaine is young, healthy, and single. Fresh out of college, she has just started a new job with an annual salary of $32,000. She figures that she will have approximately $500 left at the end of each month after covering budgetary needs.

a. How many months will it take to build her emergency fund of three months salary? (LO 11-1)

b. What are some appropriate emergency fund investment options? (LO 11-1)

c. After her emergency fund is established, how should Elaine begin allocating her $500 a month (LO 11-3)

(1) If she has a low risk tolerance?

(2) If she has a medium risk tolerance?

(3) If she has a high risk tolerance?