Question

How much of an investment company's assets must be invested in securities before it must register with the SEC as an investment company?

a) 25%
b) 50%
c) 75%
d) 90%

Answer 1

An investment company needs to register with the SEC when at least 40% of its total assets are invested in securities, which is in line with the Investment Company Act of 1940.

Step-by-step explanation:

The investment company's assets that must be invested in securities before it must register with the SEC is 40%. An investment company that primarily holds securities must register with the SEC under the Investment Company Act of 1940 if at least 40% of its total assets (exclusive of government securities and cash items) are invested in securities. This registration is crucial for ensuring compliance with regulations designed to protect investors.