Variable Annuities
Which statement about REITs is TRUE?
REITs must have at least 100 shareholders and cannot be closely held (no more than 50% owned by 5 or fewer individuals). Most REITs are publicly traded, cannot pass through losses, and dividends are taxable.
Complete Analysis & Legal Rationale
REITs must have at least 100 shareholders and cannot be closely held (no more than 50% owned by 5 or fewer individuals). Most REITs are publicly traded, cannot pass through losses, and dividends are taxable.
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:
Does not match the governing concept in the explanation.
Does not match the governing concept in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing concept in the explanation.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.