Question

Which of the following statements is true of money market mutual funds?

a. They are illiquid.
b. They are highly risky.
c. They are affordable for small investors.
d. They are issued by the U.S. government.

Answer 1

Money market mutual funds are investment programs that pool together deposits from many investors and invest them in safe short-term government bonds. They are known for their liquidity and are accessible for small investors.

Step-by-step explanation:

Money market mutual funds are investment programs that pool together deposits from many investors and invest them in safe short-term government bonds. They are known for their liquidity, as investors can easily convert their shares into cash by selling them to other investors. Unlike individual stocks, money market mutual funds have lower risks and returns. Additionally, these funds are affordable for small investors, making them accessible to a wide range of individuals.