Whena mgoney market muta i n na pory combine to ly tht ole of depository interme

Question

Whena mgoney market muta i n na pory combine to ly tht ole of depository intermediary A) The claim on the mutual fund is called 'equity' and is held by the finance company. B) The claim on the finance company is called 'commercial paper' and is held by the household. C) The claim on the household is called 'equity' and is held by the money market mutual D) The claim on the borrower is called a 'loan' and is held by the money market mutual E) The claim on the finance company is called 'commercial paper and is held by the fund. fund. money market mutual fund.

Explanation / Answer

Money market mutual fund are type of fund that has maturity of maximum one year, The fund is divided into number of stock (equity) and sale to investor (households). So, when a money market mutual fund and a finance company combine to play the role of depository, then the claim on the mutual fund is called equity and is held by finance company. Here role of finance comapny is to sale the equity to investor.

Option (A) is correct answer.

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