Multiple choice

An investor in a closed-end mutual fund can get money back before maturity by selling units:

  1. To a special trust at NAV

  2. On a stock exchange where the fund is listed

  3. To the agent through which he/she subscribed to the units of the fund

  4. Back to the fund
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In a closed-end mutual fund, units are traded on stock exchanges like shares. The fund itself does not redeem units before maturity (unlike open-end funds), so the secondary market is the primary way for investors to exit their investment.

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