Question

Which of the following are characteristics of a money market mutual fund?

Options:
A) Shares are offered without a sales charge.
B) There is a redemption fee.
C) All purchasers must receive a copy of the prospectus.
D) The letter of intent must be signed within 16 months.

Answer 1

A money market mutual fund is a kind of mutual fund that invests in some kind of short-term debt securities. Characteristics include shares offered without a sales charge, no redemption fee, and provision of a prospectus to all purchasers, but no requirement to sign a letter of intent within 16 months.

Step-by-step explanation:

The example of these kinds of mutual fund investment is Treasury bills and commercial paper. It is characterized by the following:

1. Shares are offered without a sales charge: Money market mutual funds typically do not charge a sales load or commission when shares are purchased or sold.
2. There is no redemption fee: Money market mutual funds generally do not have a redemption fee when shares are redeemed or sold.
3. All purchasers must receive a copy of the prospectus: In compliance with securities regulations, money market mutual funds are required to provide a prospectus to all purchasers, which contains important information about the fund.
4. The letter of intent must be signed within 16 months: This statement does not apply to money market mutual funds. A letter of intent is a document that allows an investor to qualify for reduced sales charges on future purchases in a mutual fund over a specified period. It is not required for money market mutual funds.