SIE practice questionmediumClosed-End Funds
How does the number of outstanding shares in a closed-end fund generally change over time?
- AIt decreases when investors redeem shares.
- BIt increases as new investors enter the fund.
- CIt remains fixed after the initial public offering (IPO).✓ Correct answer
- DIt fluctuates based on daily NAV changes.
Explanation
Why C — It remains fixed after the initial public offering (IPO).
Closed-end funds issue a fixed number of shares at IPO; share count does not change with market activity or NAV fluctuations.
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.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Investment Companies & Packaged Products questions
- A mutual fund prospectus must disclose all of the following EXCEPT:
- Closed-end funds may trade at a premium or discount to NAV because:
- Which investor is most likely to benefit from an ETF’s intraday liquidity?
- Private equity funds are best suited for which type of investor?
- A mutual fund family offers exchange privileges. This means an investor can:
- A typical hedge fund fee structure is:
- An investor interested in income wants to compare equity REITs and mortgage REITs. Which statement is most accurate?
- Which is a qualified expense for a 529 savings plan distribution?