Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Which of the following is true of a closed-end fund but not of an open-ended mutual fund?
Stable cash flow. Unlike mutual funds, no assets are flowing into or out of a closed-end fund.
2.
Closed-end funds tend to have higher commissions than regular mutual funds.
True. This is because the shares are fixed and can be bought only through the secondary market, unless they are new issues.
3.
The portfolio value of a closed-end fund share is measured by its market price.
False. The portfolio value of a closed-end fund share is measured by its net asset value. Market price reflects what you have to pay to purchase a share of a closed-end fund (plus or minus a brokerage commission).
4.
Which type of mutual fund invests in securities from developing nations?
Emerging markets fund. Emerging markets funds invest in securities from developing nations.
5.
Exchange-traded funds were first introduced in 1993 by the _______.
American Stock Exchange. They were introduced in 1993 by the American Stock Exchange (AMEX).
6.
Placing a market order tells your broker to buy shares only at a specific price or better.
False. A limit order tells your broker to buy shares only at a specific price or better.
7.
Leveraging a closed-end fund could increase the amount of capital in it. Which of the following is not a way to leverage a closed-end fund?
Secondary share offering. Leverage is done through issuing debt or preferred shares.
