Which type of fund is most likely to own illiquid securities?Group of answer choicesexchange traded funds (ETFs)open-ended mutual fundsclosed-ended mutual funds

The type of fund most likely to own illiquid securities is closed-ended mutual funds.

Here's why:

1. Exchange Traded Funds (ETFs) and open-ended mutual funds are designed to be highly liquid to accommodate frequent trading. They typically invest in liquid securities that can be easily bought or sold.

2. Closed-ended mutual funds, on the other hand, do

Closed-ended mutual funds are most likely to own illiquid securities. Here's why:

1. ETFs and open-ended mutual funds are required to be highly liquid because they allow investors to buy and sell shares on a daily basis. This means they need to have the ability to quickly convert assets into cash to meet redemptions.

2. Closed-ended mutual funds, on the other hand, issue a fixed number of shares that are traded on an exchange. This means they do not have to meet daily redemption requests from investors.

3. Because of this, closed-ended funds have the ability to invest in less liquid securities, such as private equity, real estate, and certain types of debt, which may offer higher potential returns.

4. Therefore, closed-ended mutual funds are more likely to own illiquid securities compared to ETFs and open-ended mutual funds.