Series 7 Exam Question 257: Answer and Explanation

Question: 257

If Buddy Seagull has a limited amount of funds and wants to invest in the pharmaceutical industry but does not want to limit his investments to only one or two companies, which type of fund would be MOST suitable?

• A. A hedge fund
• B. A sector fund
• C. A balanced fund
• D. A money-market fund

Correct Answer: B

Explanation:

B. A specialized or sector fund invests a minimum of 25 percent of its assets in a particular region or industry and would be the most suitable for Buddy.