Nathan Purchased Shares in a Mutual Fund Through an Initial

question 20

Multiple Choice

Nathan purchased shares in a mutual fund through an initial public offering, and now no shares are issued and shares cannot be redeemed. What kind of fund did he invest in?

• A)Equity fund
• B)Close-ended fund
• C)Municipal bond fund
• D)Hedge fund

---

Definitions:

Net Cash Flow

The variance between the cash coming into and going out of a business within a given timeframe.

Discount Rate

The interest rate used to discount future cash flows to their present value, enabling comparison of the value of investments made at different times.

Net Present Value

A method used to evaluate investments by calculating the present value of expected future cash flows minus the initial investment cost.

Cash Inflows

Refers to the money received by a company during a particular period, including revenues from sales, investments, and financing activities.