SIE Understanding Products and Their Risks Question 14: Answer and Explanation

Question: 14

Which of the following is common to a unit investment trust (UIT) and mutual funds?

• A. Trustees
• B. Ongoing management fee
• C. Board of directors
• D. Sales charges

Correct Answer: D

Explanation:

D: Both a UIT and a mutual fund may have front-end sales charges and CDSCs. A mutual fund may also have 12b-1 fees. Choice A is a characteristic of a UIT but not a mutual fund. Choices B and C are not characteristic of a UIT, which is not actively managed.