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The Investment Company Act of 1940 requires mutual funds to redeem shares within 7 calendar days. This ensures liquidity for investors, distinguishing funds from less liquid vehicles. The 7-day rule is a test staple.

Mutual fund orders are priced using forward pricing—the NAV next calculated after order receipt. An order entered at 2:30 will receive the 4:00 NAV. Orders placed after 4:00 receive the next business day’s NAV. This rule ensures fairness and prevents late trading.

Bond funds distribute interest income to investors, often monthly. Growth, international, and sector funds focus on appreciation and may pay dividends less frequently, if at all. Series 6 exams test product features to ensure proper recommendations.

Balanced funds combine stocks (for growth) and bonds (for income), offering moderate risk and a diversified approach. Money markets focus on safety and liquidity but little growth. Aggressive growth funds are high-risk, and T-bills provide safety but minimal appreciation. Balanced funds are tested frequently as a suitability match for moderate investors.

Prospectus delivery is required for purchases of new issues such as mutual funds, variable annuities, and other investment company securities. Corporate bonds traded in the secondary market (B), listed stocks (C), and Treasury securities (D) do not require a prospectus delivery, although disclosures may still be required. This rule exists to ensure that customers are provided with full disclosure of risks, fees, and objectives before purchasing investment company securities. For the Series 6 exam, candidates must know which products fall under prospectus delivery requirements.