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Portfolios 404: Closed-End Funds

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1.
Exchange-traded funds are a low-cost way to _______.
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Trade the market. This is one of their popular features.
2.
Closed-end funds can, if they wish, repurchase shares from investors.
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True. This is called a tender offer.
3.
The prices of closed-end fund shares are mostly determined by _______.
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Supply and demand. Closed-end fund share prices are determined mostly by supply and demand for the funds themselves.
4.
Placing a market order tells your broker to buy shares only at a specific price or better.
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False. A limit order tells your broker to buy shares only at a specific price or better.
5.
Diversified funds usually reflect a particular investment philosophy.
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True. For example, they may reflect balance, or they may reflect diversity within a narrow objective.
6.
Which of the following factors does not influence whether a closed-end fund share sells at a discount or premium?
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Diversity. Tax liability and low net asset value are both factors that determine whether a share sells at a discount or a premium.
7.
Many closed-end funds have low volatility.
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False. Many closed-end funds have high volatility. It is common in these funds.