SIE Understanding Products and Their Risks Question 15: Answer and Explanation

Question: 15

Which of the following is common to mutual funds and municipal fund securities?

• A. The issuer is not primarily involved in holding or trading securities.
• B. The investment portfolios may hold similar securities.
• C. The funds have private individuals and companies as investors.
• D. The funds are managed by private investment companies.

Correct Answer: B

Explanation:

B: The investment portfolios of both mutual funds and municipal fund securities may hold similar securities. Choice A is true of municipal fund securities but not mutual funds. Choices C and D are true of mutual funds but not municipal funds.