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Exam CIFC Topic 1 Question 172 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 172
Topic #: 1
Which of the following statements about total return for money market funds is TRUE?

Suggested Answer: A Vote an answer

Explanation
Current yield and effective yield are two ways of measuring the total return for money market funds. Current yield reflects the income earned on a money market fund for the most recent 14 day period, annualized.
Effective yield incorporates the compounding effect of reinvesting the income earned on a money market fund over a year. Both current yield and effective yield are displayed in the performance reports of money market funds, as they provide different information to investors.
References = Canadian Investment Funds Course, Unit 5: Types of Investments, Lesson 4: Money Market Instruments, Section 5.4.3: Total Return for Money Market Funds1; CIFC prepkit, Chapter 5: Types of Investments, Question 5.4.3 2

by Michell at Feb 05, 2025, 07:04 AM

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