SIE practice questionhardREITs - Investment Companies
REITs are not considered investment companies under the Investment Company Act of 1940 because:
- ATheir primary investments are in real estate and mortgages, not securities✓ Correct answer
- BThey are private funds
- CThey invest only in government securities
- DThey are not required to register their shares
Explanation
Why A — Their primary investments are in real estate and mortgages, not securities
REITs invest in real property and mortgages, not primarily in securities, so are exempt from the Act. B, C, and D are incorrect.
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