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Which investment can employ leverage by issuing preferred shares?

Choose wisely. There is only one correct answer.

Exchange-traded funds

Closed-end funds

Both of the above

Neither of the above

Closed-end funds. Closed-end funds can issue preferred shares, but exchange-traded funds cannot.

Which investments may issue debt to leverage their net assets?

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Closed-end funds

Mutual funds

Both of the above

None of the above

Closed-end funds. Closed-end funds can issue debt or preferred shares for leveraging purposes. Mutual funds cannot.

What trait do closed-end funds and exchange-traded funds have in common?

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They all both actively managed.

They both have underlying portfolios with net asset values.

They both achieve leverage by issuing debt.

They all have underlying portfolios with net asset values. The other choices are false.

Which investments have a portfolio of investments with a net asset value?

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Mutual funds

Closed-end funds

Both of the above

Neither of the above

Both of the above. They share this trait, though differ in many others.

Which investments are priced only once a day at market close?

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Mutual funds

Exchange-traded funds

Both of the above

Mutual funds. Exchange-traded funds are not priced in this manner.

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