Series 7 Exam Question 62: Answer and Explanation

Question: 62

Open-end funds may issue

I. common stock

II. preferred stock

III. debt securities

• A. I only
• B. I and II
• C. I and III
• D. I, II and III

Correct Answer: A

Explanation:

A. Unlike closed-end funds, open-end (mutual) funds may only issue common stock. Closed-end funds may issue common stock, preferred stock, and debt securities (bonds).