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QUESTION 34 Which of the following is not generally a feature or advantage of most money...

QUESTION 34

  1. Which of the following is not generally a feature or advantage of most money market mutual funds?

    enhanced liquidity

    higher yield than a checking account

    exemption from state and local income taxes

    greater flexibility

QUESTION 35

  1. Which of the following best defines cash concentration?

    Combining a week's worth of cash receipts into one bank deposit

    Splitting deposits between different banks

    Combining cash from multiple bank accounts into one main accoun

    Combining all of the firm's receipts into one bank deposit
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Answer #1

QUESTION 34]

A is incorrect - money market mutual funds have high liquidity because they invest in liquid securities, and these funds have a large number of investors.

B is incorrect - money market mutual funds yield higher than a bank checking account.

C is correct - exemption from state and local taxes is not usually a feature of money market mutual funds, unless they invest predominantly in tax-exempt securities.

D is incorrect - money market mutual funds have high flexibility with respect to amount invested, amount than can be withdrawn, lock-in period etc.

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