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Portfolios 404: Closed-End Funds

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1.
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.
2.
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.
3.
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.
4.
The portfolio value of a closed-end fund share is measured by its market price.
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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).
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.
You can buy exchange-traded funds from a _______.
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Broker anytime during the trading day. Investors must buy and sell their shares through a broker on the open market any time during the trading day.
7.
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.