Question of the Week

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

I. Diversified fund
II. Hedge fund
III. REMIC
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.