When Comparing Banks and Mutual Funds

question 13

Multiple Choice

When comparing banks and mutual funds,

• A)mutual funds have more liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
• B)mutual funds have less liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
• C)mutual funds have more liquidity risk than banks because all shareholders have the ability to withdraw their money on a first-come first basis.
• D)mutual funds have less liquidity risk than banks because all shareholders have the ability to withdraw their money on a first-come first basis.
• E)mutual funds have the same liquidity risk as banks because both shareholders and depositors share the fall in the loss of value on a pro rata basis.

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Definitions:

Consolidation

The process of combining multiple entities, assets, or processes into a single, more efficient structure.

Industry Share

A measure of the proportion of the market that a company or a sector holds relative to its competitors, usually expressed as a percentage.

Labor Force

All the members of a particular organization or population who are able to work, viewed collectively.

Employee Health Care

Programs and services provided by employers to maintain and improve the health and well-being of their employees.