SIE practice questionmediumMutual Funds - Prospectus
Before selling shares, what must a mutual fund provide to investors under the Investment Company Act of 1940?
- AA current prospectus✓ Correct answer
- BA private placement memorandum
- CA summary of past performance only
- DNo disclosures are required
Explanation
Why A — A current prospectus
A mutual fund must provide prospectus with full disclosure. Private placement memoranda are for exempt offerings. Past performance summary is insufficient, and disclosures are mandatory.
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