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3 January, 14:23

Which one of the following statements regarding closed-end mutual funds is false? Multiple Choice The funds always trade at a discount from NAV and redeem shares at their net asset value. None of the options are correct. The funds offer investors professional management. The funds always trade at a discount from NAV. The funds redeem shares at their net asset value.

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  1. 3 January, 14:42
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    The answer is A. funds always trade at a discount from NAV and redeem shares at their net asset value

    Explanation:

    Closed-end mutual fund is the type of fund in which there is no new Investment money. The number of outstanding shares in this fund does not change. Closed-end fund can either sell for a premium or discount to net asset value depending on the demand for the shares.

    Shares of open-end fund are redeemed are their net asset value and not closed-end fund.
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