SERIES-63 practice question 23 of 35

Which of the following statements regarding an open-end investment company is not true?

Full set: 251 questions

Answer options

A: Its shares are bought and sold through the company.

B: Its securities are federal covered.

C: Its shares may sell for either net asset value or greater than net asset value, but not below

D: Its shares are bought and sold on exchange floors. Correct answer

Correct Answer:

D. Its shares are bought and sold on exchange floors.

Explanation

The shares of an open-end investment company are not bought and sold on exchange floors. An open-end investment company is a mutual fund, and its shares are bought and sold through the company. The price per share will be either at net asset value as is the case with a no load fund, or above net asset value, as is the situation with a load fund, when the price is equal to net asset value + the sales charge (load.) Open-end investment company shares are federal covered and, as such, do not need to be registered with the state.

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