In the Event of Financial Distress,open-Ended Mutual Fund Investors

question 31

Multiple Choice

In the event of financial distress,open-ended mutual fund investors

• A)have an incentive to cash in their shares quickly since they are paid on a first come,first served basis.
• B)have an incentive to avoid a run since that will deplete the fund net asset value.
• C)have an incentive to cash in their shares quickly since that will increase the fund's net asset value.
• D)will switch into low risk bank deposits.

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Definitions:

Markup Percent

The percentage by which the cost of a product is increased to determine its selling price.

Cost

The amount of money required to purchase something or the expense associated with creating a product or service.

Markup Percent

The proportion by which the price of an item is marked up to establish its retail price.

Markup Percent

The percentage increase on the cost price of goods to determine the selling price, representing the profit margin.