A major difference between a closed-end investment company and an open-end investment company is that:
A)closed-end investment companies are generally much riskier.
B)their security portfolios are substantially different.
C)closed-end investment companies are passive investments and open-ends are not.
D)closed-end companies have a more fixed capitalization.

Question

Quizplus · Accepted Answer

Closed-end investment companies have a more fixed capitalization, meaning they have a set number of shares that are traded on the market like any other stock. In contrast, open-end investment companies issue and redeem shares on a continuous basis to meet investor demand, meaning their capitalization is more flexible. The other options given are not accurate descriptions of the differences between closed-end and open-end investment companies.

A Major Difference Between a Closed-End Investment Company and an Open-End