SIE (Securities Industry Essentials) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the SIE Exam with flashcards and multiple choice questions, each question offers hints and thorough explanations. Gear up for your exam now!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

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

Mutual fund
Exchange-traded fund (ETF)
Closed-end investment company
Money market fund

The correct answer is: Closed-end investment company

Closed-end investment companies are unique in that their shares trade on an exchange at a market price that is independent of the net asset value (NAV) of its underlying assets. This is because closed-end funds have a limited number of shares that are fixed and trade like stocks, while mutual funds, ETFs, and money market funds have variable shares and their market prices are directly tied to their NAV.