Question 21.6.3. Consider the following four mutual funds and their respective behaviors:

• Fund A is an open-end fund that engages in "late trading" by accepting orders after 4 pm
• Fund B engages in "front running" by allowing its traders to make profitable trades in their own accounts ahead of the fund's large block trades
• Fund C engages in "directed brokerage" because it has an informal, reciprocal arrangement that guarantees the fund will use the brokerage for trades but only if the brokerage recommends its clients to the mutual fund
• Fund D engages in "timing the market" because, among its watchlist of 100 stocks, it buys (sells) whenever the price moves two standard deviations below (above) its 200-day moving average

Each of these behaviors is undesirable (or illegal) EXCEPT which is acceptable; i.e., which of the following statements is TRUE?