General Knowledge · General Awareness

Consider the following statements regarding personal financial planning: Statement 1: A financial plan must ideally begin with the creation of an emergency fund equivalent to at least six months of mandatory household expenses to act as a buffer against unforeseen contingencies. Statement 2: When choosing between a fixed rate home loan and a floating rate home loan, the borrower must evaluate the interest rate cycle because floating rates are linked to external benchmarks which can lead to volatility in monthly outflows. Statement 3: Diversification across asset classes like equity, debt, gold, and real estate is guaranteed to eliminate all forms of market risk and ensure a non-negative return during a crash. Which of the statements given above are correct?