Compared to open-ended funds, investors in close-ended funds face a higher level of ____.
A
Credit risk
B
Liquidity risk
C
Market risk
D
Investment risk
Correct Option:
B
Explanation
Compared to open-ended funds, close-ended funds generally have higher liquidity risk because investors cannot redeem units directly with the fund before maturity and may need to sell them on a stock exchange, where liquidity may be limited.
