Question

To form a unit investment trust, a brokerage firm buys a portfolio of securities which are deposited into a trust. The brokerage firm then sells to the public shares, or "units" in the trust, called___________.

Answer 1

Redeemable Trust Certificates

Step-by-step explanation:

A unit investment trust refers to money pooled from various investors which is further invested in a portfolio.

In most of the cases usually a brokerage firm acts as a sponsor to the issue which purchases a portfolio comprising of various securities deposited into the trust.

Then it issues or sells these securities to the public in the form of units. The people who subscribe or buy these securities are referred to as unit holders as the issued securities are referred to as units,

In return, the unit holders are issued redeemable trust certificates which means they can sell these securities as per their requirement. Usually a unit holder would redeem his units when the price of such units is higher than the price at which he had purchased those units.