Series 7 practice questionmediumCommunications with the Public (Retail and Institutional) — Use of Performance Data
A retail communication includes performance data for a mutual fund. Which of the following is required for compliance?
- AOnly the most recent month-end performance must be shown
- BPerformance data is not permitted in retail communications
- CPerformance must be shown for 1, 5, and 10 years (or since inception)✓ Correct answer
- DOnly average annual total return for the past year is required
Explanation
Why C — Performance must be shown for 1, 5, and 10 years (or since inception)
FINRA requires mutual fund performance data to be shown for 1, 5, and 10 years (or since inception, if shorter), to provide a balanced view.
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