When comparing banks and mutual funds,
A. mutual funds have more liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
B. mutual funds have less liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
C. mutual funds have more liquidity risk than banks because all shareholders have the ability to withdraw their money on a first-come first basis.
D. mutual funds have less liquidity risk than banks because all shareholders have the ability to withdraw their money on a first-come first basis.
E. mutual funds have the same liquidity risk as banks because both shareholders and depositors share the fall in the loss of value on a pro rata basis.
Ans: B. mutual funds have less liquidity risk than banks because all shareholders share the loss of value on a pro rata basis.
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