Investment Companies

Question 1

UIT

Answer 1

Fixed portfolio, no mgt fee, supervised, unmanaged, set up for a specific period of time - set termination date, finite number of units, non-traded, redeemed by issuer

Question 2

Diversified investment company

Answer 2

At least 75% of assets raised from investors, spread out the following way:

• no more than 5% (of the 75) can be invested in one company
• cannot own more than 10% of the outstanding shares of a company

75 - 5 - 10

Question 3

Hedge fund

Answer 3

Established as a DPP (LP), issued through a private placement, w/o SEC registration, no more than 99 investors, not liquid, non-redeemable, uses leverage

Question 4

Private equity fund

Answer 4

Invests in securities that are not publicly traded, usually LP’s, only available to HNW, set up for specific period, often 10 yrs, typically leads to IPO afterwards

Question 5

Sales charge

Answer 5

POP - NAV/POP

Question 6

Max sales charge

Answer 6

8.5

Question 7

Investment company structure

Answer 7

• at least 100k sum
• at least 100 investors
• board of directors (5 yr term, annual elections, 40% outsiders

Question 8

REITs

Answer 8

At least 75% of gross income must come from real estate related projects, of that 75, 95% must be from RE divs and interest

At least 100 shareholders
5 or fewer individuals may not own more than 50% of the shares
Must distribute 90% of income

Trades on secondary mkt
Not a fund
Not an LP

Question 9

Type of investment company that distributes at least 90% of its income

Answer 9

Regulated