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SIE: Investment Companies & Packaged Products
SIE practice questioneasyClosed-End Funds

How are closed-end fund shares typically bought and sold by investors?

  1. ABy direct subscription from the fund company
  2. BThrough continuous issuance and redemption by the fund
  3. COn an exchange at market prices✓ Correct answer
  4. DVia the mutual fund distributor at NAV
Explanation

Why COn an exchange at market prices

A is correct; closed-end funds trade on exchanges in the secondary market. B and C describe open-end funds. D is also a feature of open-end mutual funds, not closed-end funds.

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