Which of the following statements regarding unit investment trusts (UITs) is (are) true? A) Shares of...
Which of the following statements regarding unit investment trusts (UITs) is (are) true?
A) Shares of UITs trade only on exchange floors and are not redeemed through the trust itself
B) UITs are better known as mutual funds
C) UITs are required to have a fixed termination date
D) Managers of UITs are able to invest in assets that are less liquid than managers of closed-end funds can
Homework Answers
Answer
.A) False: Shares OF UTI can be sold through trust itself at NAV, therefore the statement is incorrect that it can only be redeemed through trust itself.
B) True: UIT can be called as mutual fund as it is a investment company like any other mutual fund and is responsible for generating returns for investors.
C) True: UIT are required to have a fixed date for the portfolio which is being managed.
D) False: Both UIT and close ended funds invest in less liquid assets with a fixed duration.
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