Canadian Securities Course (CSC) Practice Exam · Question
What is the primary characteristic of an open-end mutual fund?
Open-end mutual funds continuously issue new shares when investors want to buy and redeem existing shares when investors want to sell, with the price based on t
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Question: What is the primary characteristic of an open-end mutual fund?
Answer options:
- It trades on an exchange and its price fluctuates based on supply and demand.
- It issues a fixed number of shares and trades like a stock. ✅ It continuously issues and redeems shares based on investor demand.
- It can only be purchased by accredited investors.
Correct answer: It continuously issues and redeems shares based on investor demand.
Explanation: Open-end mutual funds continuously issue new shares when investors want to buy and redeem existing shares when investors want to sell, with the price based on the fund's Net Asset Value (NAV).
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