Mutual Funds and Retirement Plans

Question 1

Is a covered member more or less likely to have an independence problem if he owns shares in an undiversified mutual fund rather than a diversified one?

Answer 1

More likely

Question 2

Allocated shares held in an employee stock option plan are considered indirect interests of the covered members participating in the plan until what happens?

Answer 2

The members gain the right to dispose of the shares; then the shares become direct interests.

Question 3

If covered members or their immediate family members participate in their retirement fund’s investment decisions, their interest in underlying securities is likely to be what?

Answer 3

Direct

Question 4

A covered member who owns shares in a mutual fund has what kind of interest in the fund?

Answer 4

Direct

Question 5

A covered member who owns shares in a mutual fund has what kind of interest in the fund’s underlying securities?

Answer 5

Indirect