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 greater than 12% is considered a bearish signal.
Answer: C
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