SIE Exam Question 937: Answer and Explanation

Question: 937

____ Money market funds

• A. Freely traded in the secondary markets; yield and term are determined at the time of purchase.
• B. Pay a fixed rate of interest every six months until maturity; issued in terms of ten years or more.
• C. Can be redeemed at any time without penalty; objective is to earn interest for shareholders.
• D. Unsecured promissory note issued by corporations with a fixed maturity of up to 270 days.

Correct Answer: C

Explanation:

Money market funds can be redeemed at any time without penalty. Their objective is to earn interest for shareholders.