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Upon receiving approval via a majority vote of its shareholders, a mutual fund is permitted to:
Suggested Answer: A
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Upon receiving approval via a majority vote of its shareholders, a mutual fund is permitted to change from a diversified company to a non-diversified company. The fund is not allowed to engage in margin transactions, fail to make dividend and capital gain distributions, or issue preferred stock under any circumstances.
3 comments · newest first
AN
Anika
5 days ago
I practiced a question similar to this, and I think retaining dividends and capital gains is something mutual funds can do, which makes me lean towards C.
FA
Fatima
10 days ago
I'm not entirely sure, but I feel like margin transactions are usually restricted for mutual funds. Could that be B?
ME
Melda
15 days ago
I think I remember that mutual funds can change their diversification status with shareholder approval, so maybe A is correct?