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

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Definitions:

Pheromones

Chemical substances produced and released into the environment by an animal, affecting the behavior or physiology of others of its species.

Tactile Communication

A form of nonverbal communication involving touch to convey messages or feelings between individuals.

Auditory Communication

The transmission of information or messages through sound waves, which can be received and interpreted by hearing.

Physical Communication

The use of body language, facial expressions, and other non-verbal cues to convey information or express emotions.