Trading Platforms and Exchanges for Close-End Funds

B

Close-end funds are a type of investment fund, similar to mutual funds, that have a fixed number of shares available for purchase. Unlike mutual funds, close-end funds are traded like stocks on stock exchanges.

The correct answer to the question is B. Close-end funds are traded on secondary markets. Secondary markets are where securities, such as stocks, bonds, and other investment products, are bought and sold after their initial issuance in the primary market.

In the primary market, securities are sold by issuers to investors directly. The primary market is typically where initial public offerings (IPOs) take place. Once securities are sold in the primary market, they become available for trading on the secondary market, which is where investors can buy and sell them among themselves.

Close-end funds are initially issued in the primary market through an IPO, where they are sold to investors. After the IPO, close-end funds are traded on secondary markets, such as the New York Stock Exchange (NYSE) or the NASDAQ.

Investors who want to buy or sell close-end fund shares can place orders through a brokerage firm or an online trading platform. The price of close-end fund shares on the secondary market is determined by supply and demand, just like the price of stocks.

In summary, close-end funds are traded on the secondary market, where investors can buy and sell shares among themselves after their initial issuance in the primary market.