Finra Exam Series-7 Topic 3 Question 94 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 94
Topic #: 3

[All Series-7 Questions]

Which of the following statements is pertinent to closed-end investment companies?

Athey are continuously issuing new shares

Bthey are prohibited from issuing any securities other than common stock

Ctheir shares are traded at prices determined in the open market

Dtheir shares are redeemable at net asset value

Show Suggested Answer

Suggested Answer: B

deductions from gross income to offset lower value of equipment. Depreciation is the deduction of costs for capital assets as their value declines.

by Marylin at Aug 04, 2024, 01:15 PM

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Alva

1 months ago

I'm gonna have to go with C. Closed-end funds are like the stock market's VIP lounge - their shares are traded at whatever price people are willing to pay!

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Ma

19 days ago

I think C is the correct answer. Closed-end funds are traded at prices determined in the open market.

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Howard

1 months ago

B) they are prohibited from issuing any securities other than common stock - wait, what? Since when do closed-end funds deal in anything other than plain old common shares? This one's too easy!

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Nan

1 months ago

Hmm, I think I'll go with C. Open market pricing makes sense for closed-end funds. I can already hear the trading bell ringing!

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Sheron

29 days ago

I'm not sure about this one, but C sounds reasonable. The open market pricing seems logical for closed-end investment companies.

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Malcom

1 months ago

I think D is the right choice. Closed-end funds usually have redeemable shares at net asset value.

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Eveline

1 months ago

I agree, C is the correct answer. The open market determines the prices of their shares.

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Madelyn

1 months ago

D) their shares are redeemable at net asset value - that's a trick question. Closed-end funds don't redeem shares at NAV, that's only for open-end funds.

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C) their shares are traded at prices determined in the open market - that's the key difference between closed-end and open-end funds. Closed-end funds don't issue new shares based on demand like open-end funds do.

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Keneth

8 days ago

D) their shares are redeemable at net asset value

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Nan

1 months ago

C) their shares are traded at prices determined in the open market

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Arminda

1 months ago

A) they are continuously issuing new shares

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Earnestine

2 months ago

I'm not sure, but I think C is also a valid statement, their shares are traded at prices determined in the open market.

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Mari

2 months ago

I agree with Toi, closed-end investment companies usually have redeemable shares at net asset value.

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Toi

2 months ago

I think the answer is D, their shares are redeemable at net asset value.

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Finra Exam Series-7 Topic 3 Question 94 Discussion

Contribute your Thoughts:

Alva

Ma

Howard

Nan

Sheron

Malcom

Eveline

Madelyn

Bettyann

Keneth

Nan

Arminda

Earnestine

Mari

Toi