Series 7 Exam Question 56: Answer and Explanation

Question: 56

Which of the following types of management companies have a fixed number of shares outstanding?

• A. Open-end investment companies
• B. Closed-end investment companies
• C. Unit investment trusts
• D. Variable annuities

Correct Answer: B

Explanation:

B. Both open- and closed-end funds are considered management companies. Open-end funds have a continuous offering of new securities while closed-end funds have a fixed number of shares outstanding.