Closed-end mutual funds have a limited number of shares that are sold when the funds are first created and are resold over the stock exchanges.

Question

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Closed-end mutual funds are initially created by issuing a fixed number of shares to the public. After the initial public offering, the shares are then traded on a stock exchange just like individual stocks. Unlike open-end mutual funds, closed-end funds do not continuously issue new shares or redeem shares from investors. Therefore, the number of shares remains fixed, and they are resold over the stock exchanges.

Closed-End Mutual Funds Have a Limited Number of Shares That