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Portfolios 404: Closed-End Funds

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1.
Closed-end funds can, if they wish, repurchase shares from investors.
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True. This is called a tender offer.
2.
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.
3.
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).
4.
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.
5.
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).
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.
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.