According to the Investment Company Act of 1940, the definition of "investment company" could include which of the following

[A] broker/dealers who have investment discretion over more than 100 accounts

[B] A company whose business is to invest and reinvest in securities.

[C] Pooled investments in precious metals

[D] Insurance company general accounts funding fixed insurance and annuity contracts.

Question

Business

Autumn Branch

3 February, 14:03

According to the Investment Company Act of 1940, the definition of "investment company" could include which of the following

[A] broker/dealers who have investment discretion over more than 100 accounts

[B] A company whose business is to invest and reinvest in securities.

[C] Pooled investments in precious metals

[D] Insurance company general accounts funding fixed insurance and annuity contracts.

+4

Answers (1)

Know the Answer?

Jasmine Camacho · Answer 1

Option (B) is the right answer.

Explanation:

According to the investment company Act of 1940, the investment companies are those companies whose main business is to gathers investment capital to invest them in marketable securities.

Hence According to the scenario, the most appropriate answer is option (B).

While the other option is incorrect because of the following reason:

Brokers/dealers can not be considered as an investment company because they are not the company. Pooled investments in metals are not an investment company but considered as the commodity pool. Insurance companies are also not investment companies.