Which of the following is an example of an emergency fund?

An emergency fund is specifically designed to cover unplanned expenses that can arise unexpectedly, such as medical emergencies, car repairs, or sudden job loss. The correct choice emphasizes cash reserved for unexpected medical expenses, highlighting its role in financial security during unforeseen circumstances.

In contrast, funds set aside for planned vacations or purchasing a new car are intended for routine, foreseeable expenditures and do not serve the purpose of mitigating financial stress in emergencies. Similarly, investments in stocks or bonds entail a risk, as their value can fluctuate and they are not readily accessible for immediate cash needs. Thus, they do not fit the definition of an emergency fund, which should be liquid and available for immediate use when a financial emergency arises.