Which type of fund is traded among investors on an exchange?

The correct choice is an exchange-traded fund (ETF). ETFs are a type of fund that is traded on a stock exchange, similar to individual stocks. They can be bought and sold throughout the trading day at market prices, which can fluctuate based on supply and demand. This trading mechanism allows investors to capitalize on intraday price changes and increases the liquidity of the investment.

In contrast, open-ended mutual funds are not traded on an exchange. Instead, shares can be bought and sold only through the fund company at the net asset value (NAV), which is calculated at the end of the trading day. Closed-end mutual funds do trade on exchanges, but they have a fixed number of shares, meaning investors often buy them at a premium or discount to the NAV based on market conditions. Money market funds typically operate similarly to open-ended mutual funds, focusing on short-term debt instruments and providing liquidity but without being traded on an exchange.

Thus, the unique feature of ETFs being traded on an exchange sets them apart as the correct answer in this context.