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:

Ex-Confederate States

Refers to the Southern states that seceded from the United States to form the Confederacy during the American Civil War and were later readmitted to the Union.

Paternalism

A policy or practice of treating or governing people in a fatherly manner, especially by providing for their needs without giving them rights or responsibilities.

13th Amendment

Amendment to the United States Constitution, ratified in 1865, which abolished slavery and involuntary servitude, except as punishment for a crime.

Emancipation

The act of being freed from restraint, bondage, or slavery, often used in the context of the abolition of slavery in the United States.