SIE Exam Question 711: Answer and Explanation

Question: 711

Which of the following acts regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities? The act is designed to minimize conflicts of interest that arise in these complex operations.

• A. Securities Exchange Act of 1934
• B. Trust Indenture Act of 1939
• C. Investment Company Act of 1940
• D. Uniform Securities Act of 1956

Correct Answer: C

Explanation:

The Investment Company Act of 1940 regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities. The act is designed to minimize conflicts of interest that arise in these complex operations.