Which One of the Following Statements Is Correct Concerning the Mutual

question 72

Multiple Choice

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

• A) When mutual funds have a lot of cash it is a bearish signal because managers are not buying stocks.
• B) Low mutual fund cash is bullish because it means managers have been buying stocks.
• C) Low mutual fund cash indicates that fund managers might be forced to sell securities should investors wish to withdraw funds, a bearish signal.
• D) A high MFCR is like high short interest in that it indicates pent up demand.

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Definitions:

Y Axis

The vertical axis in a graph or chart, typically used to represent the range of a second variable in comparison to the first variable on the X axis.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded.

Movement

Refers to a change in position, location, or state of an object or concept over time.

Substitute Goods

These are goods that can be used in place of one another, such that the increase in price of one leads to an increase in demand for the other.