Which of the following statements regarding closed-end investment companies is false?

Question

Quizplus · Accepted Answer

The false statement is that a closed-end investment company may not issue preferred stock. Although open-end companies (mutual funds) are prohibited from doing so, this is not a restriction governing closed-end companies. Closed-end companies shares sell on exchange floors and may trade below net asset value. Closed-end companies may be either diversified or non-diversified, and the income earned by the company and distributed to its shareholders is not taxed at the investment company level. It is taxed at the shareholder level only.

Which of the Following Statements Regarding Closed-End Investment Companies Is