SIE practice questionmediumInvestment Company Act of 1940
A UIT sponsor uses false advertising to promote a new trust series. This would be considered:
- AA disclosure practice
- BAcceptable for new products
- CRequired by the SEC
- DA prohibited activity under the Investment Company Act of 1940✓ Correct answer
Explanation
Why D — A prohibited activity under the Investment Company Act of 1940
False advertising by UIT sponsors is specifically prohibited by the Investment Company Act. The SEC requires truthful advertising and full disclosure.
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