Jargon Rapid Growth Is a Mutual Fund That Has Traditionally

question 54

Multiple Choice

Jargon Rapid Growth is a mutual fund that has traditionally accepted funds from new investors and issued new shares at net asset value.Jeremy Jargon manages the fund himself and has become concerned that its level of assets has become too high for his management abilities.He issues a statement that Jargon will no longer accept funds from new investors, but will continue to accept additional investments from current shareholders.Which of the following is true about Jargon Rapid Growth fund

• A)Jargon used to be an open-end fund but has now become a closed-end fund.
• B)Jargon has always been an open-end fund and will remain an open-end fund.
• C)Jargon has always been a closed-end fund and will remain a closed-end fund.
• D)Jargon is an open-end fund but would change to a closed-end fund if it wouldn't accept additional funds from current investors.
• E)Jargon is violating SEC policy by refusing to accept new investors.

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Definitions:

Diminishing Returns

A principle stating that as investment in a single area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Marginal Product

The additional output generated by employing one more unit of a particular input, holding all other inputs constant.

Hiring Labor

The process of engaging individuals to perform services or work for compensation.

Stock Prices

The current market price of a share of a company's stock, reflecting investor perceptions of the company's future financial prospects.