SIE practice questionmediumInvestment Company Act of 1940 - UITs
Which is a characteristic of a unit investment trust (UIT) under the Investment Company Act of 1940?
- AThey have a continuously managed portfolio
- BThey are unmanaged portfolios of securities✓ Correct answer
- CThey issue redeemable and nonredeemable shares
- DThey invest only in U.S. Treasury securities
Explanation
Why B — They are unmanaged portfolios of securities
UITs are unmanaged investment companies with portfolios fixed for the life of the trust. Actively managed portfolios are more characteristic of mutual funds, and UITs may hold various types of securities.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Investment Companies & Packaged Products questions
- What function does a market maker perform on a securities exchange?
- A registered representative is helping a client build a portfolio. What principle requires the rep to make only…
- Before selling shares, what must a mutual fund provide to investors under the Investment Company Act of 1940?
- Which statement correctly describes U.S. Treasury bills (T-bills)?
- Which is true about both U.S. Treasury notes (T-notes) and Treasury bonds (T-bonds)?
- A pension fund making large trades in the market is best described as which type of market participant?
- A closed-end fund differs from a mutual fund in which key way?
- Which type of investment vehicle is regulated by the Investment Company Act of 1940?