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45. (d) Sweep account The most important source of the changes in supply conditions that stimulate financial innovation has been the (a) aging of the baby-boomer generation. (b) dramatic increase in the volatility of interest rates. (c) improvement in information technology. (d) dramatic increase in competition from foreign banks. (e) deregulation of financial institutions 46. Adjustable-rate mortgages (a) protect households against higher mortgage payments when interest rates rise. (b) keep financial institutions' earnings high even when interest rates are falling. (c) have many attractive attributes, explaining why so few households now seek fixed-rate mortgages. (d) do only (a) and (b) of the above. (e) none of the above 48. 47. Mutual funds (a) pool the resources of many small investors by selling these investors shares and using the poceeds to buy securities. (b) allow small investors to obtain the benefits of lower transaction costs in purchasing securities. (c) provide small investors a diversified portfolio that reduces risk. (d) do all of the above. (e) do only (a) and (b) of the above Which of the following is an advantage to investors of an open-end mutual fund? (a) Once all the shares have been sold, the investor does not have to put in more money. (b) The investors can sell their shares in the over-the-counter market with low transaction fees. (c) The fund agrees to redeem shares at any time. (d) The market value of the fund's shares may be higher than the value of the assets held by the fund 49. From largest to smallest, the four classes of mutual funds are (a) equity funds, bond funds, hybrid funds, money market funds (b) equity funds, money market funds, bond funds, hybrid funds (c) money market funds, equity funds, hybrid funds, bond funds (d) bond funds, money market funds, equity funds, hybrid funds

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