Liquidity Is Important to a Mutual Fund Because

question 37

Multiple Choice

Liquidity is important to a mutual fund because:

• A)A fund that is more liquid will attract more investors.
• B)The fund's shareholders may want to redeem their shares at any time.
• C)The fund's managers need liquidity to trade actively.
• D)The fund needs to distribute payouts to its shareholders and managers periodically.

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Definitions:

Cardiologist

A specialist doctor who diagnoses and treats conditions related to the heart and blood vessels.

Human Capital

Competencies, wisdom, and learning acquired by an individual or collective, evaluated for their financial or beneficial impact on an enterprise or sovereign state.

Compensating Differential

Additional income or benefits offered to employees to offset the unpleasant aspects or higher risks of a particular job.

Transfer Payments

Payments made by the government to individuals without any expectation of goods or services in return, such as welfare or social security.