The Net Asset Value of a Money Market Mutual Fund

question 110

Multiple Choice

The net asset value of a money market mutual fund:

• A)is dependent upon the value of the fund's assets.
• B)is guaranteed to be $1 a share.
• C)fluctuates as new shares are issued and old shares are redeemed.
• D)varies inversely with market interest rates.
• E)is insured by the sponsoring investment advisory firm.

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Definitions:

Carrying Cost

Expenses associated with holding or storing inventory over a period, including warehousing, insurance, depreciation, and opportunity costs.

Safety Stock

An additional quantity of an item held in the inventory to reduce the risk that the item will be out of stock.

Lead Time

The amount of time that elapses between the initiation and completion of a process.

Economic Production Quantity

A model that determines the optimal quantity of a product to produce, minimizing total holding and setup costs.