Money market mutual funds MMMFs have caused disintermediatio

Money market mutual funds (MMMFs) have caused disintermediation at banks at times. This is because MMMFs a. offer guaranteed rates of return. b. are less risky than bank deposits. c. sometimes pay higher interest rates than bank deposits. d. none of the above e. are now federally insured, like bank deposits.

Solution

c: Sometimes pay higher interest rates than bank deposits

Disintermediation means that the intermediaries are done away with. This is done since MMFs ususally have a higher rate of return.

(MMMFs have volatile returns and high risk. They are not insured.)