Series 7 - General Securities Representative Exam
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Which of the following is TRUE of UITs?
They have a variable portfolio of securities and charge a management fee
A
They are extremely liquid - more so than a blue chip stock
B
They have a guaranteed rate of return in their prospectus
C
They have a fixed portfolio of securities and do not charge a management fee.
D
Explanations
Unit Investment Trusts do not charge a management fee. They have a fixed portfolio of securities. UITs may or may not be tradable on an exchange. Some need to be redeemed directly with the issuer.