A Mutual Fund Is Engaged in the Short Term and Temporary

question 2

Multiple Choice

A mutual fund is engaged in the short term and temporary purchase of index futures,for purposes of minimizing its cash exposures.Which "use" most closely explains their actions?

• A) Risk management
• B) Speculation
• C) Reduced transaction costs
• D) Regulatory arbitrage

---

Definitions:

Social Loafing

The occurrence where people put in less effort towards accomplishing an objective as part of a group than they do when working individually.

Exert Less Effort

A phenomenon where individuals decrease their effort output in situations where they perceive lesser necessity for intense work.

Group's Leader

The individual who takes on the role of directing, influencing, and coordinating the activities of a group towards achieving its objectives.

Certain Traits

Specific characteristics or qualities that are consistent and enduring in an individual, contributing to their personalities and behaviors.