Which of the following statements best describes a money market mutual fund?
A)It pools funds from many investors and uses these funds to purchase very safe, highly liquid securities.
B)It is a short-term marketable IOU issued by the U.S. federal government.
C)It is the part of a firm's net income that it reinvests.
D)It is a financial agreement between a firm and a bank in which the bank pre-approves credit up to a specified limit.

Question

Quizplus · Accepted Answer

A money market mutual fund is a type of mutual fund that invests in short-term, highly liquid and safe securities, such as government bonds, treasury bills, and commercial paper. The fund pools the money of many investors to purchase these securities, with the goal of earning a small return while maintaining a low level of risk.

Which of the Following Statements Best Describes a Money Market