1. Which one of the following statement(s) regarding closed-end mutual funds is/are INCORRECT?

[I] The number of shares outstanding changes when new shares are sold or the existing shares are redeemed.

[II] Issuers of closed-end funds redeem shares at their net asset values.

[III] The closed-end funds always trade at discounts relative to their net asset values.

Select one:

a. [I] and [II] only.

b. [III] only.

c. [II] only.

d. [I], [II], and [III].

e. [I] only.

2. Which statement about investing in funds is generally TRUE?

Select one:

a. The net return of a fund is higher than its gross return.

b. Funds with higher front-end loads are, everything else equal, more attractive for investors.

c. On average, actively managed funds have lower fees than passive index funds.

d. Investors can find the fee structure of a fund in its prospectus.

e. I cannot find a correct statement.