A closed-end fund versus an open-end fund refers to

Question

Quizplus · Accepted Answer

A closed-end fund issues a fixed number of shares that can be traded on an exchange or in the over-the-counter market. Investors can buy and sell shares of the closed-end fund like stocks, and the share price fluctuates based on supply and demand. In contrast, an open-end fund continuously issues and redeems shares based on the demand from investors, and the share price is determined by the net asset value (NAV) of the underlying assets. Therefore, the main difference between closed-end funds and open-end funds is how the shares are distributed and redeemed. While other factors such as penalties, maturity date, and performance can also vary, they are not inherent characteristics that define the fund structure.

A Closed-End Fund Versus an Open-End Fund Refers to