Investment Companies: Fixed UITS/ REITs/BDCs

Listed REITs offer all of the following benefits to purchasers EXCEPT: A. diversification of investments B. ready marketability of shares C. capital gains potential D. preferential taxation of dividends received

D

REITs can invest in all of the following EXCEPT: A. mortgages B. real estate C. government securities D. direct participation programs

D

Which of the following statements are TRUE about REITs? I 90% of Net Investment Income must be distributed to shareholders to be "regulated" under Subchapter M II 75% of assets must be invested in real estate related activities to be "regulated" under Subchapter M III Gains may be passed through to shareholders under "conduit" tax treatment IV Losses may be passed through to shareholders under "conduit" treatment

I II III

Which sources of REIT income are counted towards the 75% test required by Subchapter M? I Net rental income II Interest income from mortgages III Real estate tax refunds IV Dividend income

I II III

When comparing Real Estate Investment Trusts (REITs) to Real Estate Limited Partnerships (RELPs), which of the following statements are TRUE? I REITs allow for flow through of gain II RELPs allows for flow through of gain III REITs allow for flow through of loss IV RELPs allow for flow through of loss

I II IV

Which of the following statements are TRUE regarding REITs? I REITs are similar to closed end investment companies II REITs issue shares of beneficial interest representing an undivided interest in a pool of real estate investments III REITs are similar to open end investment companies IV REITs are registered under the Securities Act of 1933

I II IV

Which of the following can be distributed by an REIT to its shareholders? I Dividends II Interest III Capital Gains IV Capital Losses

I III

Which statements are TRUE regarding BDCs? I BDCs invest in securities of publicly traded companies II BDCs make direct investments in privately-held companies III BDCs are publicly traded IV BDCs are not publicly traded

I III

Unit Investment Trusts issue securities that are: A. negotiable B. fungible C. redeemable D. transferable

c

Which of the following securities can be sold by an individual holding an investment companies/variable annuities (Series 6) registered representative's license? I Municipal Investment Trusts II Real Estate Investment Trusts III Municipal Bond Funds IV Revenue Bonds

i iii

REITs can invest in which of the following? I Limited partnerships II Government securities III Mortgages IV Real estate

ii iii iv

What is the main objective of investing in Equity REITs? A. Income and growth B. Capital appreciation and stability C. Tax deductions and tax credits D. Speculation and aggressive gains

A

Which sources of REIT income are counted towards the 75% test required by Subchapter M? I Property rentals II Interest from mortgages III Capital gains on property sales IV Real estate tax refunds

ALL

All of the following statements are true about REITs EXCEPT: A. REITs are similar to closed end investment companies B. REITs issue redeemable shares C. REITs are listed and trade on stock exchanges D. REITs must invest at least 75% of their assets in real estate related activities to qualify for conduit tax treatment

B

All of the following statements are true regarding REITs EXCEPT: A. Mortgage REITs profit from the spread between interest on monies borrowed and mortgage investments made by the REIT B. REITs allow for flow through of gain and loss to the investor C. REITs are either Exchange listed or trade "over-the-counter" D. For an REIT to be regulated under Subchapter M, it must derive at least 75% of its income from real estate related activities

B

Who would be MOST likely to invest in a BDC? A. Low risk investor seeking preservation of capital B. Moderate risk investor seeking higher returns C. High net worth investor seeking dividends D. Sophisticated investor seeking a tax shelter

C