Answer these as true, false, or unceratin.

a) TFU: bank holidays and suspensions of convertibility have no purpose, because if a bank undergoing a run was insolvent before, it will very likely be insolvent a few days later.

b) Money market mutual funds take in your dollars (like deposits) and invest them in short-term safe financial instruments to earn you interest. In essence, you buy 1 share for $1. They

take your $1 and buy $1 in corporate paper, earning, say, $0.0027 for you overnight. If you then cash out your shares the next day, you get $1.0027. TFU: Even though this is liquid

and acts like a bank, this system is not vulnerable to runs like banks.

c) Now assume there is a rule stating that MMMFs could cash people out at $1 if (for instance) the value of the MMMFs assets were not less than $0.99 per dollar. TFU: This makes a run

on MMMFs possible