Practice Quiz

FINRA Series 6

Category - Series 6

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The profile of the Invesco Utilities Fund stipulates that 80% of its funds will normally be invested in stocks of firms in utilities-related industries. This suggests that the Invesco Utilities Fund is:
  1. a sector fund.
  2. a non-diversified investment company.
  3. an asset allocation fund.
  4. both A and B.
Explanation
Answer: A - Invesco Utilities Fund profile suggests that the fund is a sector fund, which is a specialized fund that invests mainly in stocks within a specific industry. This does not mean that it is non-diversified. As long as it is invested in a portfolio of securities with a value exceeding 75% of its assets such that no more than 5% is invested in any one firm and no more than 10% of any firm’s voting stock is owned, it is considered to be a diversified management company.
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