SIE practice questionmediumInvestment Company Act of 1940 - Closed-End Funds
Closed-end funds differ from mutual funds in that closed-end funds:
- ATrade on exchanges at market prices✓ Correct answer
- BAre redeemable directly from the fund company
- CDo not invest in stocks and bonds
- DAre exempt from SEC regulation
Explanation
Why A — Trade on exchanges at market prices
Closed-end funds are exchange-traded; mutual funds are redeemed at NAV. Both can invest in stocks/bonds; both are regulated by the SEC.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Companies & Packaged Products questions
- Which feature is unique to unit investment trusts (UITs)?
- A registered representative must always consider which factor when recommending investments?
- An investment company is formed to invest in stocks and is offering its own shares to the public. What must it do under…
- A mutual fund is regulated primarily by which federal law?