n NISM Certifications
V-A NISM Series V-A
Medium

When compared to open-ended funds, investors in close-ended funds face a higher level of _______.

Practice question from Nism VA Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Credit risk

  2. Liquidity risk

    Correct answer

  3. C

    Market risk

  4. D

    Investment risk

Why this is the answer

Close-ended funds are listed on stock exchanges, but they may have lower liquidity, making it harder for investors to buy or sell units at their desired price. In contrast, open-ended funds offer better liquidity.

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