- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 3. Portfolio Management: An Overview
- Subject 5. Pooled Investments
CFA Practice Question
An open-end mutual fund ______
II. fluctuates in the number of shares outstanding as shares are purchased and redeemed.
III. will redeem existing shares on demand.
I. offers shares to the public through the fund distributor.
II. fluctuates in the number of shares outstanding as shares are purchased and redeemed.
III. will redeem existing shares on demand.
Correct Answer: I, II and III
Open-end funds are unique in that the number of shares outstanding is not fixed. The fund employs a distribution company to handle ongoing sales of the fund's shares and will make additional shares available to both new and existing shareholders. Open-end funds also stand ready to redeem shares of the fund on demand at current market value.
User Contributed Comments 4
| User | Comment |
|---|---|
| itconcepts | Calculating diluted eps must be a nightmare |
| tschakawaka | @itconcepts: no, i just did it some time ago - i am auditing funds |
| jonan203 | man, i don't even want to think about the book keeping involved. |
| joeclark | Just have the NAV at the end of the period |