Certified Financial Planner (CFP) Exam 2025 – 400 Free Practice Questions to Pass the Exam

To determine Darrin and Kathi's Emergency Fund Ratio, it's essential to understand how this ratio is calculated. The Emergency Fund Ratio measures how many months' worth of living expenses can be covered by the cash in their emergency fund.

This ratio is calculated by dividing the total amount in their emergency fund by their monthly living expenses. If the result is approximately 1.9695 months, it indicates that the couple has nearly two months' worth of expenses saved, which is a solid foundation for unexpected financial needs.

A ratio close to this value reflects a prudent approach to risk management, as having at least three to six months' worth of expenses is typically recommended. Therefore, the calculated amount aligns well with accepted financial planning practices, making it the most appropriate answer among the options provided. It signifies that while they may not have a fully adequate emergency fund, they are on the right path toward securing their financial future.