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.
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