Mutual Funds
Under the 75-5-10 diversification rule, a diversified mutual fund may invest no more than what percentage of its assets in any single company?
The 75-5-10 rule requires that no more than 5% of a diversified fund's assets be invested in any single company. Additionally, 75% of assets must be diversified, and the fund cannot own more than 10% of any company's vot
Complete Analysis & Legal Rationale
The 75-5-10 rule requires that no more than 5% of a diversified fund's assets be invested in any single company. Additionally, 75% of assets must be diversified, and the fund cannot own more than 10% of any company's voting stock.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Regulatory framework for investment companies including mutual funds (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.