Once all the shares are originally sold, an investor must purchase shares in a(n) ____ fund from some other investor who is willing to sell them.

Question

Quizplus · Accepted Answer

Closed-end funds have a fixed number of shares, which are traded on stock exchanges, so once all the shares are sold, an investor must purchase shares from other investors (secondary market). Open-end and no-load funds continuously issue new shares, so the investor can purchase shares directly from the fund company, and there is no need to purchase from other investors. Load funds charge fees that are deducted from the investor's initial investment or subsequent purchases, so they are not relevant in this context. Municipal funds invest in municipal securities, but this is not relevant to the question.

Once All the Shares Are Originally Sold, an Investor Must