A closed-end investment fund has which of the following characteristics?

• A. (i) always buy back investors' shares at net asset value
• B. (ii) is not open to new investors
• C. (iii) has a variable number of shares
• D. (i), (ii) and (iii)

Answer: (B)

Closed-end funds raise capital through a one-time initial offering and then keep a fixed number of shares outstanding, trading them on the open market. They don’t continuously issue new shares or redeem existing ones in response to investor demand. That means they are not open to new investors in the sense of ongoing fund redemptions and issuances. The number of shares remaining outstanding is fixed, so having a variable share count is not a defining trait. Although the market price can differ from the fund’s net asset value, there’s no guarantee of a buyback at NAV. So the statement that best describes a closed-end fund is that it is not open to new investors after the initial offering.