Banking · Mutual Funds
Closed-ended mutual fund schemes typically maintain lower cash balances than open-ended schemes because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Open-ended funds invest primarily in illiquid real estate assets
- 2Closed-ended funds operate under strict short-term maturity periods
- 3Open-ended funds must accommodate unexpected share redemptions from investors at any time✓
- 4Open-ended funds are required to pay higher corporate taxes
Correct answer
Open-ended funds must accommodate unexpected share redemptions from investors at any time
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