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Portfolios 404: Closed-End Funds

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1.
Exchange-traded funds were first introduced in 1993 by the _______.
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American Stock Exchange. They were introduced in 1993 by the American Stock Exchange (AMEX).
2.
The most expensive type of broker is a full-service broker.
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True. A full-service broker charges the highest commissions.
3.
When the demand for a closed-end fund share is less than its supply, the share sells at _______.
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A discount. The share will be discounted to make it more attractive on the market.
4.
Which of the following is true of a closed-end fund but not of an open-ended mutual fund?
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Stable cash flow. Unlike mutual funds, no assets are flowing into or out of a closed-end fund.
5.
Which type of mutual fund invests in securities from developing nations?
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Emerging markets fund. Emerging markets funds invest in securities from developing nations.
6.
When a discount begins to shrink, an investor is likely to lose money.
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False. An investor can make money if he or she bought it at discount and the discount shrinks.
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?
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Secondary share offering. Leverage is done through issuing debt or preferred shares.