Which of the Following Is a Drawback of a Money

question 13

Multiple Choice

Which of the following is a drawback of a money market fund from an investment company?

• A)penalty if money is withdrawn early
• B)lower rate of interest if redeemed within the first five years
• C)minimum required holding period
• D)lack of FDIC insurance
• E)taxed at a higher rate than other investments

---

Definitions:

Face Value

The nominal or original value stated on a financial instrument, such as a bond or stock certificate, not necessarily its current market value.

Coupon Rate

An annual percentage rate that reflects the interest paid on a bond relative to its face value.

Yield To Maturity

The total return anticipated on a bond if it is held until the date it matures, including interest payments and the gain or loss due to the difference between its purchase price and its face value.

Face Value

The nominal or dollar value of a security stated by the issuer, primarily relevant for bonds and the amount repaid at maturity.