Which of the following characteristics apply to closed-end mutual funds?
I. Unlimited number of outstanding shares.
II. Transactions are between shareholders.
III. Market prices may be higher or lower than NAV.
IV. Fund will repurchase shares at any time.

Question

Quizplus · Accepted Answer

II and III are correct. Closed-end mutual funds have a fixed number of shares and do not continuously issue new shares or redeem shares like open-end funds. Transactions occur on the open market between investors, not with the fund itself, and the market price of the shares can deviate from the net asset value (NAV).

Which of the Following Characteristics Apply to Closed-End Mutual Funds