Question

All of the following are valid ways to purchase open-end mutual funds except: Multiple Choice A reinvestment plan. A regular account transaction. A voluntary savings plan. All of the ways listed are valid purchase options. A contractual savings plan.

Answer 1

An open-end mutual fund cannot be bought from the securities market via a contractual savings plan, as investment is made for a predetermined period during this.

What are open-end mutual funds?

Mutual funds, which are open-end, are easily available to be bought by any person who wishes to invest a part of his capital into such asset classes are called open-end mutual funds.

They can be bought voluntarily and have no lock-in periods, and thus are readily available to be bought and sold in the secondary market.

The reason a contractual savings plan cannot be used to buy open-end mutual funds is because such saving plans have lock-ins and are subject to be invested for a fixed period.

Hence, option D; a contractual savings plan cannot be utilized for the purpose of purchasing an open-end mutual fund.

Learn more about open-end mutual funds here:

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