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:

Incapacitating Efforts

Actions or strategies designed to prevent someone or something from functioning in a normal or effective way.

Anxiety-Producing Situations

Circumstances or events that trigger feelings of worry, nervousness, or fear, often leading to physical or emotional stress responses.

Phobias

Intense, irrational fears of specific objects, activities, or situations that lead to avoidance behavior.

Agoraphobia

An anxiety disorder characterized by an intense fear of being in spaces or situations where escape might be difficult or help might not be available in the event of a panic attack.