Which is a mutual fund whose shares are issued and redeemed by the investment company at the request of investors?

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Multiple Choice

Which is a mutual fund whose shares are issued and redeemed by the investment company at the request of investors?

Open-end funds issue and redeem shares directly with the fund at the current net asset value per share. This means investors can buy shares from the fund and sell them back to the fund, causing the number of outstanding shares to expand or contract with investor demand. This continuous creation and redemption at NAV is the hallmark of traditional mutual funds. By contrast, ETFs trade on an exchange and are created/redeemed in blocks by authorized participants, UITs issue a fixed number of shares and don’t redeem at NAV in the same ongoing way, and closed-end funds have a fixed share count and trade on an exchange with prices driven by supply and demand rather than NAV. Therefore, the description fits an open-end fund.

Open-end funds issue and redeem shares directly with the fund at the current net asset value per share. This means investors can buy shares from the fund and sell them back to the fund, causing the number of outstanding shares to expand or contract with investor demand. This continuous creation and redemption at NAV is the hallmark of traditional mutual funds. By contrast, ETFs trade on an exchange and are created/redeemed in blocks by authorized participants, UITs issue a fixed number of shares and don’t redeem at NAV in the same ongoing way, and closed-end funds have a fixed share count and trade on an exchange with prices driven by supply and demand rather than NAV. Therefore, the description fits an open-end fund.

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