Investment companies may not use funds invested with them for deals that are not "arm's length," that is, with persons affiliated with the company.

Question

Quizplus · Accepted Answer

Investment companies are required by law to act in the best interest of their investors and to avoid any conflict of interest. Therefore, they cannot use funds invested with them for deals with persons affiliated with the company, as it may lead to potential conflicts of interest and unfair advantages.

Investment Companies May Not Use Funds Invested with Them for Deals