1. Which of the following is unlikely to be a problem for mutual fund managers? (Choose the false answer.)

A) Being forced to sell portfolio assets at low prices if too many shareholders redeem shares at the same time.

B) Income restrictions as a result of the limited number of mutual fund shares they have to sell.

C) Investment planning difficulties resulting from irregular cash flows in and out of the mutual fund.

D) The inability to invest in small firms because of the large monetary sums they deal with.

2. Which of the following is true of a firm that has no current liabilities and long term debt to equity ratio of 1

1. the firm has no debt

2. the firms total debt ratio is 50%

3. the firm has twice as much equity as it has debt

4. innsufficient data