Investment Companies

Question 1

Closed end

Answer 1

Fixed initial market cap because a specific number of shares are initially sold to the public
No new shares issued
May trade at a premium or discount to net asset value

Question 2

Open end

Answer 2

Unlimited number is shares. Fund family continues to issue shares
Shares trade at Net Asset Value (NAV)
NAV = assets - liabilities / shares outstanding

Question 3

Unit investment trust

Answer 3

Self liquidating, have passive management and no trading of assets within the trust

Can be equity or fixed income unit investment trust. Typically fixed income trust.

Issues units not shares

Can be sold back to the uit at nav