If You Purchase Shares in a Closed-End Fund at the Initial

question 71

Multiple Choice

If you purchase shares in a closed-end fund at the initial offer price, you should expect to:

• A)earn an abnormally high rate of return the first year.
• B)immediately see a decrease in the value of your investment.
• C)receive offers to purchase your shares at a premium prior to the official first day of trading.
• D)earn tax-advantaged income.
• E)realize a capital gain if you sell your shares as soon as trading in the shares commences.

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Definitions:

Social Identity Theory

A psychological theory proposing that individuals derive part of their self-concept from their perceived membership in a relevant social group.

Ingroups

Social groups to which an individual feels a sense of membership, belonging, and identity.

Outgroups

Groups of people that an individual does not identify as belonging to, often seen as different or apart from one's own group.

Self-knowledge

An individual's understanding of their own personality, feelings, motives, desires, and other aspects of the self.