SIE practice questionmediumDPPs — Subscription Agreement
Before investing in a DPP, an investor must complete a subscription agreement that includes:
- AA guarantee of minimum returns by the general partner
- BA requirement that the investor maintain a margin account
- CAn acknowledgment that the investment is illiquid and the investor meets suitability requirements✓ Correct answer
- DProof that the investor has previously invested in at least 3 other DPPs
Explanation
Why C — An acknowledgment that the investment is illiquid and the investor meets suitability requirements
The subscription agreement requires the investor to acknowledge key risks (illiquidity, potential for loss) and confirm they meet suitability and financial requirements. DPPs are generally offered to accredited or sophisticated investors. No guarantee of returns is provided (A). Prior DPP experience is not required (C). DPPs cannot be purchased on margin (D).
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