Which mutual fund has shares issued and redeemed by the fund company at investors' request?

• A. Open-End Fund
• B. Municipal
• C. Discount
• D. Credit Bureau

Answer: (A)

Open-end funds issue and redeem shares directly with investors in response to each investor’s request. When new money comes in, the fund creates fresh shares; when investors redeem, shares are canceled. The price they transact at is the net asset value per share, calculated daily. This structure means there isn’t a fixed number of shares outstanding, which is the defining feature of this fund type.

The other terms don’t describe this mechanism. A municipal fund refers to the kind of securities the fund invests in (municipal bonds), not how shares are created or redeemed. A discount talks about pricing relative to value in other contexts (often related to closed-end funds or other instruments), not the open-ended issuance/redemption process. A credit bureau has no connection to mutual funds.