Question of the Week

Which of the following are not types of open-end management investment companies?

I. Diversified fund
II. Hedge fund
IV. Balanced fund

a) I, II, III, IV
b) I, IV
c) II, III, IV
d) II, III

Answer: The correct answer is d)

Hedge funds are extremely aggressive entities that engage in margin and short-selling.  They are not investment companies, they are generally structured as a type of limited partnership.  REMIC stands for Real Estate Mortgage Investment conduit; they invest in real estate and mortgages rather than securities. The other two choices are common types of mutual funds.

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