Practice Quiz

FINRA Series 6

Category - Series 6

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In order for the Invest4U Mutual Fund to qualify as a regulated investment company under Internal Revenue Code Subchapter M, it must:
  1. distribute at least 90% of its net investment income to its shareholders.
  2. distribute at least 98% of its net income from capital gains to its shareholders.
  3. invest at least 75% of its monies in diversified securities.
  4. Both A and B are required for Invest4U to qualify as a regulated investment company.
Explanation
Answer: D - To qualify as a regulated investment company, Invest4U must distribute at least 90% of its net investment income to its shareholders and distribute at least 98% of its net income from capital gains to its shareholders. Only 50% of its monies needs to be invested in diversified securities to qualify.
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