Question

Which is a difference between mutual funds and Unit Investment Trusts?

1. UITs have a maturity date
2. UITs have to pay taxes
3. UITs have to diversify
4. All of the above are differences

______________ are often paid out as commissions to brokers who sell funds to their clients.

1. 12 b-1 fees
2. Front-end Loads
3. Public Offering Prices
4. Redemption charges

The ____________ may allow investors to use investments in all of a family’s funds in order to get a lower load.

1. Combination Privilege
2. Conversion Privilege
3. Exchange Privilege
4. Intention Privilege

Answer 1

1. mutual funds can be bought and sold on daily basis. So, Mutual funds do not expire or mature. However, UITs have a specific maturity date.

Both products can be invested in a diversified portfolios.

And both have to pay taxes.

The only difference is UITs have maturity date while MFs don't.

Hence the answer is (a)

2.

Answer is b. Front end loads

3. The answer is (a) combination privilege that allows an investor to combine two simultaneous purchases of different portfolios in order to get a lower load.