Practice Quiz

FINRA Series 7

Category - Series 7

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Which of the following statements about the custodian for an open-end mutual fund is correct?
  1. the custodian performs all management, supervisory, or investment functions
  2. the custodian may perform an essential clerical service for the fund and its shareholders
  3. the custodian takes part in the sale of fund shares
  4. the custodian affords protection against decline in value of fund shares
Explanation
Answer: B - the custodian may perform an essential clerical service for the fund and its shareholders. The custodian holds the cash and securities of the investment company and performs the bookkeeping functions. It does not have a supervisory role.
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