Which of the following could indicate financial distress?

Prepare for the Accredited Financial Counselor Exam. Study using flashcards and multiple-choice questions, each equipped with hints and elaborate explanations. Equip yourself for success!

B is the correct answer as the accumulation of debt and unmet financial obligations are clear signs of financial distress. When an individual or household has more debt than they can manage, it often results in missed payments, late fees, and a downward spiral into more severe financial problems. This situation can lead to stress and anxiety, affecting overall well-being.

In contrast, the other options represent positive financial situations. Steady income and savings demonstrate stability and good financial management, suggesting that an individual is likely in a secure position. High credit scores and a positive savings rate indicate that someone is effectively managing their finances, maintaining good creditworthiness, and likely living within their means. Similarly, investing in stocks and bonds typically reflects financial health, as it suggests that a person has surplus funds available for investment, which relates to effective wealth-building strategies and financial planning.

Thus, the accumulation of debt alongside outstanding financial obligations is a strong indicator of financial distress, making it the most appropriate answer in this context.

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