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Which of the following investment companies will always be passively managed?
Suggested Answer: B
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A unit investment trust is always passively managed. Some mutual funds, such as index funds, may also be passively managed, but not all mutual funds are passively managed.
29 comments · newest first
NO
Nobuko
9 hours ago
Not really, they can be actively managed sometimes.
SU
Sue
6 days ago
But what about A) face-amount certificate? Isn't that also passive?
AN
Anastacia
11 days ago
Agreed! They don't change the portfolio.
NO
Nobuko
16 days ago
I think it's B) a unit investment trust. Always passive.
JA
Janessa
21 days ago
True! It would help clarify the concepts better.
RI
Rickie
26 days ago
I wish they had more examples in the exam.
HA
Hana
1 month ago
Passive management is key for long-term stability.
FL
Florinda
1 month ago
Exactly! Unit investment trusts are the clear choice here.
JA
Janessa
1 month ago
Yes, mutual funds can be actively managed.
RI
Rickie
2 months ago
I feel confused about mutual funds. They can be active too, right?
HA
Hana
2 months ago
Agreed! They don't change their portfolio.
FL
Florinda
2 months ago
I think it's B) a unit investment trust. Always passive.
OD
Odette
2 months ago
I feel confident about this question now!
WA
Wai
2 months ago
B is definitely the best choice.
AN
Annabelle
2 months ago
True, D) closed-end companies are also actively managed.
EL
Elke
3 months ago
C) mutual funds can be actively managed too.
RO
Ronnie
3 months ago
No, that's not passively managed.
JU
Juliana
3 months ago
I’m not sure. What about A) face-amount certificate?
NA
Nadine
3 months ago
Yeah, I agree! It's always passively managed.
NO
Noble
3 months ago
I think it's B) a unit investment trust.
MA
Malcom
3 months ago
Just learned something new today! Thanks for clarifying!
CL
Clarinda
4 months ago
No way, I thought closed-end funds were also passively managed sometimes.
HO
Hoa
4 months ago
Wait, are you sure about that? I thought some mutual funds could be passive too.
LE
Leatha
4 months ago
Totally agree, that's the right answer!
EL
Elouise
4 months ago
B) a unit investment trust is always passively managed.
RO
Rose
4 months ago
I feel like closed-end investment companies can be actively managed too, so that rules out D. Maybe it's definitely B?
JE
Jeannetta
6 months ago
I recall a practice question about investment companies, and I think face-amount certificate companies are also not passively managed.
CL
Clarinda
6 months ago
I'm not entirely sure, but I remember that mutual funds can be actively managed, so I don't think it's C.
NG
Ngoc
6 months ago
I think the answer might be B) a unit investment trust because they typically have a fixed portfolio and don’t actively trade.