QUESTION 5

1. All of the following statements are correct regarding UITs except:

a. For UITs that contain only fixed-income securities, the maturity date is usually determined using the longest term bond.

b. A UIT typically makes a one-time "public offering" of only a specific, fixed number of units.

c. Many UIT sponsors maintain a secondary market for liquidity purposes, which allows owners of UIT units to sell them back to the sponsors and allows other investors to buy UIT units from the sponsors.

d. The authorized participant transfers the shares into the UIT and receives creation units, which are typically 50,000 share blocks.

QUESTION 6

1. National Fund is a closed-end fund with a cash balance of $80 million. American Fund is an open-end fund with a cash balance of $300 million. Both National and American have $2 billion in market value of assets. National has less cash most likely because it:

a. Invests in less liquid assets than American.

b. Does not permit investors to redeem shares at any time.

c. Has greater management fees than American.

d. Has less access to capital than American.