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Unlike a normal mutual fund (MF) that holds a portfolio of stocks, a money market mutual...

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Finance

Unlike a normal mutual fund (MF) that holds a portfolio ofstocks, a money market mutual fund (MMMF) holds a portfolio ofmoney market instruments like Treasury Bills, highly ratedcommercial paper, and overnight repo agreements. Explain why theMMMF choses to hold the money market instruments rather thanstocks.

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Answer The mutual funds invest money in stocks and bonds which are highly volatile and risky Money market mutual funds MMMF are considered to be less risky than the stocks and bonds issued in the market This is because MMMFS are lessriskier vehicles such as    See Answer
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Unlike a normal mutual fund (MF) that holds a portfolio ofstocks, a money market mutual fund (MMMF) holds a portfolio ofmoney market instruments like Treasury Bills, highly ratedcommercial paper, and overnight repo agreements. Explain why theMMMF choses to hold the money market instruments rather thanstocks.

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