When the redemptions of money market mutual fund shares exceeds sales of shares, the fund accommodates the amount of excessive redemptions by
A)selling some of the assets contained in the portfolio.
B)issuing stock.
C)issuing bonds.
D)borrowing from banks.

Question

Quizplus · Accepted Answer

When the redemptions of money market mutual fund shares exceeds sales of shares, the fund accommodates the amount of excessive redemptions by selling some of the assets contained in the portfolio. This is known as liquidation and is a common practice for money market funds to meet redemptions. Issuing stock, bonds, or borrowing from banks are not common methods for money market funds to accommodate redemptions.

When the Redemptions of Money Market Mutual Fund Shares Exceeds