Liquidity Is Important to a Mutual Fund Because

question 36

Multiple Choice

Liquidity is important to a mutual fund because:

• A) a fund that is less 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:

Organization

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A characteristic of services that means they cannot be touched, seen, tasted, or held in a physical sense before they are purchased.

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