Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

CFA Events Calendar

View full calendar

Recommended Discussions

See how our partners can help you ace your CFA exams.

CFA Level 1 Question of the Week - Portfolio Management

Matt_AnalystPrepMatt_AnalystPrep MontrealPosts: 37 Associate
edited September 4 in CFA Practice Questions

Which of the following is/are the most likely similarity(ies) between exchange-traded funds and closed-end funds?

I. Both types of funds are passively managed to match a particular index.

II. In both types of funds, the market price of shares and the net asset value (NAV) can differ significantly.

III. Both types of funds can be sold and purchased on the open market.

AnalystPrep
CFA Question Bank and Study Notes at https://analystprep.com 
Register today for 120 free practice questions

CFA Level 1 Question of the Week - Portfolio Management 8 votes

A. III only
75% 6 votes
B. I & III only
0% 0 votes
C. I & II only
25% 2 votes

Comments

  • The correct answer is A.

    ETFs and closed-end funds are sold and purchased in the exchange market rather than from the fund itself. ETFs are passively managed to match the index while closed-end funds are actively managed. In closed-end funds, the market price of shares and the NAV differ significantly, whereas ETFs are designed to keep their share price close to the NAVs.
    AnalystPrep
    CFA Question Bank and Study Notes at https://analystprep.com 
    Register today for 120 free practice questions
Sign In or Register to comment.