Multiple choice

For a closed end scheme, initial issue expenses

  1. can be amortised over a period of 10 years

  2. can be amortised over a period not exceeding 5 years

  3. can not be recovered from investors

  4. can be amortised over the life of the scheme
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Closed-end schemes have the advantage of being able to amortize initial issue expenses over the entire life of the scheme (typically 3-5 years or more), unlike open-end schemes which are limited to 5 years.

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