Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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What is the SEC-mandated period for advertising the yield of a money market fund?

7 days
30 days
1 year
5 years

The correct answer is: 30 days

The correct duration for advertising the yield of a money market fund is 30 days, as mandated by the SEC. This requirement is in place to ensure that investors receive relevant and timely information that reflects the fund's performance over a recent and consistent period. By using a 30-day period, the SEC aims to provide a standard measure that allows investors to compare yields among different money market funds effectively. This regulation helps to maintain transparency in the advertising of yields, ensuring that the figures presented are both representative of the fund's recent performance and not cherry-picked from an arbitrary time frame. By standardizing this period to 30 days, it helps to prevent misleading claims that could arise from using longer or shorter periods, which may not accurately represent the fund's current yield situation.