SIE practice questionmediumClosed-End Funds
The price that an investor pays for a closed-end fund share is usually:
- AUpdated only once per day
- BFixed by the fund at NAV
- CBased on current market supply and demand✓ Correct answer
- DInflated by a mandatory front-end load
Explanation
Why C — Based on current market supply and demand
Closed-end fund shares are bought and sold in the secondary market, so investors pay a market price set by supply and demand. They are not continuously redeemed by the fund at NAV.
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