Question

Which benefit of investing in mutual funds pertains to the ability to sell your shares at...

Which benefit of investing in mutual funds pertains to the ability to sell your shares at market price due to a large demand for mutual fund assets?

Liquidity
Withdrawal option
Dividend reinvestment
Diversification
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Answer #1

Answer -
Option - Liquidity is correct.
Explanation -
Liquidity is an important advantage under which an investor can convert his asset in to cash without any decrease of its value.It is the ability of an asset to be converted in to cash while purchase or sale transactions without any influence in price. Regarding the investment of mutual funds it is the ability to sell its in open market price due to a large demand.There is a time span of invesing in mutual funds and when benifits from it becomes due.During this time market may change because of changing economic activities.In such a case liquidity offered by mutual fund give an opportunity of review our fund and rebalance our Investment portfolio.

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