Series 7 practice questionmediumDirect Participation Programs 448
Compared with listed equities, DPP interests are generally:
- Amore actively traded and more transparent intraday
- Bmore illiquid and more difficult to value✓ Correct answer
- Cinsured against market loss by SIPC
- Dfree of suitability review because they are private assets
Explanation
Why B — more illiquid and more difficult to value
DPPs are typically illiquid, may involve long holding periods, and are harder to value than exchange-traded products. That makes suitability and risk disclosure especially important.
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