Final answer:
Mutual funds are structured in three ways: closed-end funds, open-end funds, and exchange-traded funds (ETFs)
Step-by-step explanation:
Mutual funds are structured in three ways: closed-end funds, open-end funds, and exchange-traded funds (ETFs).
Closed-end funds issue a fixed number of shares that are traded on the stock exchange. Investors can buy or sell shares of closed-end funds on the stock market, and the price of the shares is determined by supply and demand.
Open-end funds, also known as mutual funds, issue new shares to investors and redeem shares when investors want to sell. The price of shares in an open-end fund is determined by the net asset value (NAV) of the underlying securities.
Exchange-traded funds (ETFs) are similar to open-end funds, but they trade on the stock exchange like closed-end funds. ETFs are designed to track the performance of a specific index or asset class.