SIE practice questionmediumInvestment Company Act of 1940 - UITs
Which feature is unique to unit investment trusts (UITs)?
- AShares trade on secondary markets
- BThey are unmanaged and have a fixed portfolio✓ Correct answer
- CThey allow reinvestment of earnings into new securities
- DThey are typically leveraged
Explanation
Why B — They are unmanaged and have a fixed portfolio
UITs are unmanaged with fixed portfolios. Closed-end funds trade on exchanges, open-ended mutual funds reinvest, and UITs are not leveraged.
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