What is a Mutual Fund Dealer required to do?

What is a Mutual Fund Dealer required to do?

• A. Distribute commodities directly
• B. Trade securities as a principal
• C. Distribute mutual funds only
• D. Engage exclusively in foreign currency transactions

Answer: (C)

A Mutual Fund Dealer's primary responsibility is to distribute mutual funds. This means they facilitate the buying and selling of mutual fund shares to investors, providing them with access to a diversified portfolio of securities managed by professional asset managers. The role of the dealer focuses on the promotion and distribution of these investment products, allowing individuals to invest in a variety of assets without the need for direct trading.

The other options highlight activities that fall outside the scope of a Mutual Fund Dealer's duties. Distributing commodities or engaging exclusively in foreign currency transactions are roles typically associated with other financial professionals or firms. Similarly, trading securities as a principal involves a different set of responsibilities, generally connected to dealer operations in a broader securities context, not limited to mutual funds. Therefore, the correct answer captures the essence of what a Mutual Fund Dealer is specifically engaged in, aligning with industry regulations and practices.