A unit investment trust differs from a mutual fund in that
A)it offers a combination of debt and equity securities in the unit.
B)its originator guarantees a redemption price.
C)its original portfolio is generally unchanged until the trust is dissolved.
D)it requires considerably greater portfolio management.

Question

Quizplus · Accepted Answer

A unit investment trust typically has a fixed portfolio of securities that is not actively managed, whereas a mutual fund can have a changing portfolio and is actively managed. Additionally, the originator of a unit investment trust guarantees a redemption price, making it different from a mutual fund. While a unit investment trust does include a combination of debt and equity securities, this is not the main difference between it and a mutual fund. Lastly, neither a mutual fund nor a unit investment trust requires considerably greater portfolio management compared to the other.

A Unit Investment Trust Differs from a Mutual Fund in That