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; portfolios are fixed for the life of the trust. Managed portfolios (B) describe mutual funds. UIT shares are redeemable only, and they may contain various securities, not just Treasuries.
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