Which One of the Following Statements Is Correct Concerning the Mutual

question 2

Multiple Choice

Which one of the following statements is correct concerning the mutual fund cash ratio (MFCR) ?

• A) The lower the value of the MFCR, the stronger the market will be in the future.
• B) The MFCR is equal to the cash inflows into money market funds divided by the cash flows out of money market funds.
• C) A low MFCR indicates that fund managers might be forced to sell securities should investors wish to withdraw funds.
• D) A MFCR value greater than 12 is considered a bearish signal.

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Definitions:

Entry Barrier

Obstacles that make it difficult to enter a particular market, including high start-up costs, strict regulations, or significant competition.

Marginal Revenue

The supplementary earnings achieved by selling another unit of a good or service.

Demand Schedule

A table showing the quantity of a good that consumers are willing to buy at various price levels, holding all other factors constant.

Economies of Scale

Economies of scale describe the cost savings companies experience as their volume of production increases, leading to a lower cost for each unit produced.