Which one of the following statements is correct concerning the mutual fund cash ratio (MFCR)?
A) The lower the value of the MFCR, the stronger the market will be in the future.
B) The MFCR is equal to the cash inflows into money market funds divided by the cash flows out of money market funds.
C) A low MFCR indicates that fund managers might be forced to sell securities should investors wish to withdraw funds.
D) A MFCR value greater than 12 is considered a bearish signal.

Question

Quizplus · Accepted Answer

A mutual fund cash ratio (MFCR) is a measure of the percentage of a mutual fund's portfolio that is held in cash or cash equivalents. A low MFCR indicates that the fund has a higher percentage of its portfolio invested in securities, leaving it more vulnerable to forced selling should investors wish to withdraw funds.

Which One of the Following Statements Is Correct Concerning the Mutual