SIE Understanding Products and Their Risks Question 67: Answer and Explanation

Question: 67

Which of the following has fiduciary responsibility in a direct participation program that is a real estate limited partnership?

• A. Board of Directors
• B. Limited partners having more than ten percent of ownership
• C. All limited partners
• D. General partner

Correct Answer: D

Explanation:

D: Choice D is correct because the general partner receives the invested funds from limited partners, manages operations, and keeps financial records. Choice A is incorrect because a direct participation program that is a real estate limited partnership has no board of directors. Choices B and C are incorrect because no limited partner has any other participant's invested funds and therefore no fiduciary responsibility.