Economics · Economy
Which of the following is a key distinguishing feature between Open-ended Mutual Funds and Closed-ended Mutual Funds regarding investor liquidity?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Closed-ended funds have no entry or exit loads, whereas Open-ended funds are mandated by SEBI to charge a minimum 2 percent exit load.
- 2Open-ended funds permit continuous purchase and redemption of units at NAV-related prices, while Closed-ended funds have a fixed maturity period and trade on the stock exchange for liquidity.✓
- 3Open-ended funds are listed on the stock exchange for trading, whereas Closed-ended funds are not listed.
- 4Closed-ended funds allow investors to exit at any time by selling units back to the fund house at the current NAV.
Correct answer
Open-ended funds permit continuous purchase and redemption of units at NAV-related prices, while Closed-ended funds have a fixed maturity period and trade on the stock exchange for liquidity.
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