Which of the Following Is False Concerning the Money Market

question 38

Multiple Choice

Which of the following is false concerning the money market mutual funds?

• A) Their NAV is always $10 per share.
• B) Money market mutual funds are often closed-end funds.
• C) Money market mutual funds invest in high quality, low-risk securities.
• D) As funds earn interest on the investments, their fund owners are given more shares.
• E) Money market mutual funds in general offer a safe investment with relatively low risk.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to replace more expensive items with less expensive ones.

Marginal Utility Data

Information regarding the incremental benefit or satisfaction gained from consuming an additional unit of a good or service.

Utility Maximization

Utility maximization refers to the concept in economics where individuals or entities choose the allocation of resources to maximize their satisfaction or happiness.

Utility Maximization

The process by which consumers allocate their spending to maximize the total satisfaction or utility received from their available resources.