Which One of the Following Is Not a Withdrawal Option

question 98

Multiple Choice

Which one of the following is not a withdrawal option for a mutual fund?

• A)withdrawing a specified,dollar amount each investment period
• B)liquidating,or "selling off" a certain number of shares each investment period
• C)withdrawing a fixed percentage of asset growth
• D)withdrawing all income that results from dividends and capital gains distributions
• E)withdrawing a stated amount and treating it as a short-term loan

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Certainty Equivalent NPV

A method of valuing risky projects or investments by adjusting the expected cash flows to reflect the investor's risk aversion, providing a 'risk-free' net present value.

Cost of Capital

The minimum return on investment a business necessitates to uphold its market value and entice financial inflow.

Certainty Equivalent NPV

A method used to adjust the net present value (NPV) of an investment to account for risk, equating it to a certain but lower cash flow.