SIE 1 and 3 Exam with Complete Solutions

SIE 1 and 3 Exam with Complete Solutions The Investment Company Act of 1940 classified all the following as investment companies except A) face-amount certificates. B) private investment companies. C) management companies. D) unit investment trusts. ANSWER B, The three classifications established under the Investment Company Act of 1940 are face-amount certificates, unit investment trusts, and management companies (open and closed-end funds). Private investment companies do not come under the Act of 1940. Accrued interest on corporate bonds is calculated using A) actual days in each month and actual days in the year. B) 30 days in each month and 365 days in each year. C) 30 days in each month and 360 days in each year. D) actual days in each month and 360 days in each year. ANSWER C, Corporate and municipal bonds use the artificial 30-day, 360-day calendar, but government bonds use actual days.