Closed-end fund shares trade like share of common stock, whereas open-end funds are not sold to other investors, they are redeemed with the fund manager.

Question

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Closed-end funds have a fixed number of shares and trade on an exchange like stocks, allowing investors to buy and sell shares from each other. Open-end funds, on the other hand, issue new shares or redeem existing shares directly with the fund manager based on the fund's current net asset value, and do not trade on exchanges.

Closed-End Fund Shares Trade Like Share of Common Stock, Whereas