When Comparing Banks and Mutual Funds

question 13

Multiple Choice

When comparing banks and mutual funds,

• A)mutual funds have more liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
• B)mutual funds have less liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
• C)mutual funds have more liquidity risk than banks because all shareholders have the ability to withdraw their money on a first-come first basis.
• D)mutual funds have less liquidity risk than banks because all shareholders have the ability to withdraw their money on a first-come first basis.
• E)mutual funds have the same liquidity risk as banks because both shareholders and depositors share the fall in the loss of value on a pro rata basis.

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Definitions:

G7 Countries

A group of seven major advanced economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

Productivity Rank

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