Products & RisksQuestion 23 of 125
A unit investment trust (UIT) is characterized by:
a.An actively managed portfolio and a board of directors
b.A perpetual life with continuous trading by managers
c.A fixed, generally unmanaged portfolio held until a set termination date
d.A guarantee of principal at maturity
Explanation
A UIT holds a fixed portfolio of securities that is not actively traded and has a predetermined termination date. It has no board of directors or investment adviser making ongoing decisions, distinguishing it from managed open-end and closed-end companies under the Investment Company Act of 1940.
Law Reference: Investment Company Act of 1940Practice all 125 questions free — no signup required.
Related questions on this topic
- A mutual fund share has a net asset value (NAV) of $19.05 and a maximum sales charge of 5%. What is the public offering price?
- A breakpoint in a front-end load mutual fund refers to:
- An exchange-traded fund (ETF) differs from a traditional open-end mutual fund primarily because an ETF:
- A variable annuity's separate account value during the accumulation phase depends on:
- A fixed annuity exposes the contract holder primarily to which risk?
- A real estate investment trust (REIT) that qualifies for favorable tax treatment must generally:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against FINRA Series 7 General Securities Representative Exam · How we review