SIE practice questionhardInvestment Company Act Requirements
The Investment Company Act of 1940 requires mutual funds to:
- AIssue shares only to institutional investors
- BRedeem shares at the next calculated NAV after order is received✓ Correct answer
- CProhibit joint accounts
- DTrade on national exchanges
Explanation
Why B — Redeem shares at the next calculated NAV after order is received
Mutual funds must redeem at NAV (net asset value) per the Act. Shares are available to retail investors, joint accounts are common, and mutual funds do not trade on exchanges.
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