Income Beginner:
Introduction to Money Market Funds
Test your knowledge
Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Money market funds that invest in short-term municipal securities are tax-exempt.
Choose wisely. There is only one correct answer.
True
False
True. Tax-exempt money market funds invest in short-term municipal securities.
2.
The Federal Deposit Insurance Corporation and the National Credit Union Share Insurance Fund do not insure money market mutual funds.
Choose wisely. There is only one correct answer.
True
False
True. Some investors consider this a disadvantage.
3.
Money market mutual funds usually invest in long-term government bonds and CDs.
Choose wisely. There is only one correct answer.
True
False
False. Money market funds hold short-term debts of both government units and corporations.
4.
All of the following are privileges of owning a money market fund except that ______.
Choose wisely. There is only one correct answer.
You may be able to withdraw funds from ATMs
You may write checks
You may use it for a business account
All of the above may be privileges of a money market fund.
All of the above may be privileges of a money market fund. Money market funds have many privileges, which make them attractive and versatile.
5.
One of the major risks of money market mutual funds is _______ risk.
Choose wisely. There is only one correct answer.
Currency
Tax
Inflation
Inflation. Because the returns of money market funds are relatively low, inflation can chip away at their purchasing power.
Submit
DONE