SIE Exam Question 714: Answer and Explanation

Question: 714

All but which of the following are correct regarding unit investment trusts (UITs)?

• A. Units may be bought or sold on the secondary market.
• B. Upon termination of a UIT, any remaining securities in the trust will be sold and proceeds will be paid to investors.
• C. Units are sold to investors for a minimum cost of $100,000.
• D. They typically have low fees and expenses.

Correct Answer: C

Explanation:

Unit investment trusts (UITs) are sold to investors for a typical cost of $1,000. Units may be bought or sold on the secondary market, and upon termination of a UIT, any remaining securities in the trust will be sold and proceeds will be paid to investors. They typically have low fees and expenses.