Practice Quiz

FINRA Series 6

Category - Series 6

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One difference between a unit investment trust (UIT) and a closed-end fund is that
  1. shares of closed-end funds trade on the exchange floors, unlike shares of UITs.
  2. unlike UITs, closed-end funds have a fixed number of shares.
  3. the shares of UITs are redeemable, whereas the shares of closed-end funds are not.
  4. closed-end funds are established with a termination date, unlike UITs.
Explanation
Answer: C - A difference between a UIT and a closed-end fund is that the shares of UITs are redeemable, whereas the shares of closed-end funds are not. Shares of UITs also trade on exchange floors, like the shares of closed-end funds. Both UITs and closed-end funds have a fixed number of shares, but UITs are established with a termination date, while closed-end funds have no termination date.
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