International Baccalaureate (IB) Practice Exam

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Study International Baccalaureate Exams with tailored multiple choice quizzes and flashcards. Gain confidence with explanations and hints for every question. Ace your exams!

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Following the Five Foundations will help you to, one day, become self-insured. True or False?

True
False
Only if you invest wisely.
Only in specific circumstances.

The correct answer is: True

The statement is true because following the Five Foundations is designed to establish a strong financial foundation that can lead to self-insurance—a state in which you have the financial security and resources to cover your own risks without relying on traditional insurance. The Five Foundations typically include establishing an emergency fund, paying off debt, saving for retirement, and building wealth, among others. By adhering to these principles, individuals can gradually build their financial literacy and capability, ultimately achieving a level of financial independence that negates the need for insurance in certain situations. The foundation emphasizes the importance of long-term planning and financial discipline, both of which are essential for becoming self-insured. Over time, as one builds savings and investments while managing risks, the ability to self-insure becomes more attainable. The focus is on being proactive with finances rather than reactive, which is a key aspect of self-insurance.