SIE practice questionmediumInvestment Company Act of 1940 - Mutual Funds
A mutual fund portfolio manager trades shares for personal benefit ahead of fund trades. This is a violation of which fiduciary obligation?
- ADuty to maximize capital appreciation
- BDuty to maintain leverage
- CDuty to put the fund’s interests ahead of personal gain✓ Correct answer
- DDuty to diversify
Explanation
Why C — Duty to put the fund’s interests ahead of personal gain
Portfolio managers must always place the fund’s interests before their own. Leverage, appreciation, and diversification are investment strategies, not fiduciary standards.
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