Multiple choice

Liabilities in the balance sheet of a mutual fund are

  1. in the form of long-term loans

  2. strictly short term in nature

  3. combination of long term and short term

  4. not allowed as per regulations
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Mutual funds maintain minimal liabilities - primarily payables for ongoing expenses like management fees, accrued expenses, or short-term payables. Long-term loans are rare as funds operate on investor capital. This conservative liability structure ensures funds remain liquid and can meet redemption obligations without borrowing.

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