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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Jimmy Johnson

1 March, 02:17

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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Answers (1)

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Evangeline Chandler · Answer 1

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.