Chartered Alternative Investment Analyst (CAIA) Practice Exam 2026 – All-in-One Guide to Master Your Certification!

A closed-end fund is defined by its structure of raising a fixed amount of capital through an initial public offering (IPO) and then becoming publicly traded on an exchange. Once the capital is raised, the fund does not continuously issue shares to accommodate new investors or allow ongoing redemptions. Instead, shares are bought and sold on the exchange, where their prices fluctuate based on supply and demand, rather than the fund’s net asset value. This means that once the fund has closed to new investments, the capital remains fixed, making this option the most accurate description of a closed-end fund.