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Portfolios 404: Closed-End Funds

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1.
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.
2.
A closed-end fund invests in a fixed number of securities.
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False. A closed-end fund issues a fixed number of shares, but the portfolio is managed and not fixed.
3.
Using your securities as collateral to buy more shares is called _______.
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Leveraging. You must put up your own securities as protection for the leveraging.
4.
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.
5.
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.
6.
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.
7.
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).