Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Investment Company and Variable Contracts Products Principals (Series 26) Exam. Study with interactive quizzes, multiple-choice questions, and comprehensive explanations. Boost your exam confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

A Letter of Intent (LOI) may be backdated by how many calendar days to account for prior investments?

30 days
60 days
90 days
120 days

The correct answer is: 90 days

A Letter of Intent (LOI) can be backdated up to 90 calendar days to reflect prior investments. This provision allows investors to apply the accumulated amounts of their previous investments toward meeting a breakpoint in a mutual fund. This is significant because breakpoints offer reduced sales charges, which can provide a financial benefit to the investor. The ability to backdate the LOI ensures that investors can receive credit for their earlier contributions, thereby potentially lowering their overall cost of investment in the fund. The 90-day window strikes a balance between providing investors with flexibility and preventing the misuse of the LOI process, which could otherwise undermine the pricing structure of the fund. Understanding this timeframe is essential for compliance with regulations concerning mutual fund sales and investor communications.