The following has its stock traded on the regular secondary market:
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A. B. C. D. E.C
The market price of its shares is determined by supply and demand and typically offers no further shares and does not repurchase the shares on demand.
In the given question, we are asked to identify the type of investment company whose stock is traded on the regular secondary market. Let's analyze each option to determine the correct answer:
A. Investment Management Company: An investment management company is an entity that manages portfolios of securities on behalf of its clients. These companies do not typically have their stock traded on the secondary market. Instead, they earn fees based on the assets under management.
B. Load Fund: A load fund is a type of mutual fund that charges a sales commission or load fee when shares are bought or sold. Load funds are typically sold through brokers or financial advisors, and their shares are traded on the secondary market. However, the load fee is a cost borne by the investor and not directly related to the stock trading aspect.
C. Closed-End Investment Company: Closed-end investment companies issue a fixed number of shares through an initial public offering (IPO) and their shares are subsequently traded on the secondary market, such as stock exchanges. Closed-end funds typically trade at a discount or premium to their net asset value (NAV), which is determined by the market demand for their shares.
D. No-Load Fund: A no-load fund is a mutual fund that does not charge a sales commission or load fee when shares are bought or sold. No-load funds are also typically sold on the secondary market, and investors can buy or sell shares directly without incurring any additional fees.
E. Open-End Investment Company: Open-end investment companies, commonly known as mutual funds, continuously issue and redeem shares based on investor demand at the current net asset value (NAV). Open-end funds do not have their shares traded on the secondary market. Instead, investors buy and sell shares directly with the fund at the NAV.
Based on the analysis above, the correct answer is C. Closed-end investment company. These companies issue a fixed number of shares through an IPO and their shares are traded on the secondary market, similar to stocks. The market price of closed-end fund shares is determined by supply and demand factors, resulting in a potential discount or premium to the fund's NAV.