CFA Practice Question

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CFA Practice Question

An investor wishes to liquidate their position in an investment company. They do so by selling their shares on the NYSE. They were most likely invested in a(n) ______.
A. hedge fund
B. closed-end fund
C. open-end fund
Explanation: Investors in closed-end funds liquidate their position by selling their shares in the secondary market.

User Contributed Comments 4

User Comment
Iyal how about open-end? where do they sell their shares?
jdollpru Investors liquidate their shares directly back to fund at bid price.
jdollpru i forgot, closed-end funds do not issue new shares so all market activity is done in secondary market not by normal redemption at the NAV and bid price
Criticull I get it. Thanks for the clarity.
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