SIE Exam Question 264: Answer and Explanation

Question: 264

Which of the following investment instruments trades on an exchange at a market price not directly related to its net asset value?

• A. open end investment company
• B. private hedge fund
• C. put and call option contracts
• D. closed-end investment company

Correct Answer: D

Explanation:

D: Only the closed-end investment company trades at supply & demand pricing on an Exchange, and has no specific relationship to the fund's underlying asset value.