Question

Open-end mutual funds are the most common type of investment company. Which of the following statements characterize these funds?
Check all that apply.
A. Make automatic reinvestment easy.
B. Allow shareholders to convert shares from one fund to another within the same fund family.
C. Always publicly traded on exchanges.
D. Good choices only if you have lots of capital to invest.
E. Convenient to own but difficult to set up.

Answer 1

Answer:

The answers are letter A and B.

Explanation:

A. Make automatic reinvestment easy, because the capital gains are automatically used to buy more shares.

B. Allow shareholders to convert shares from one fund to another within the same fund family, it is an interesting low rate exchange transaction. It costs $5 to $10 per transaction.