Close-end funds:

Question

Close-end funds:

Quizplus · Accepted Answer

A) Close-end funds are not redeemable, meaning that investors cannot buy or sell shares of the fund directly with the fund manager. Instead, they must do so on a secondary market, such as a stock exchange, where the price may not always reflect the underlying value of the fund's assets.

B) The investment portfolios of close-end funds are generally managed by separate entities, such as investment companies or banks.

C) Close-end funds are permitted to invest in a greater amount of "illiquid" securities than mutual funds. This means that they can invest in assets that are not easily bought and sold in the market, such as real estate or private equity. However, this also means that close-end funds may be subject to more liquidity risk if investors attempt to sell their shares in large volumes.

Close-End Funds