The Investment Company Act of 1940

question 12

Multiple Choice

The Investment Company Act of 1940

• A) contains various anti-fraud provisions and record keeping and reporting requirements for fund advisors.
• B) regulates broker-dealers.
• C) requires federal registration of all public offerings of securities.
• D) regulates the structure and operations of mutual funds.
• E) contains a code of ethics and standards of professional conduct.

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Definitions:

Overhead Expenses

Represents the ongoing costs of operating a business that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Selling Price

The amount of money for which something is sold or offered for sale to a buyer.

Marked Down

A reduction in the price of goods to stimulate sales or clear out inventory.