Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

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How long does the plan company have to post a letter to the investor after the initiation of a 45-day free-look period?

30 days
45 days
60 days
90 days

The correct answer is: 60 days

The correct duration for a plan company to post a letter to the investor after the initiation of a 45-day free-look period is 60 days. This is important because the free-look period is designed to give investors a chance to review their investment and make informed decisions about whether to continue with the contract. The requirement for the plan company to send out a letter within 60 days ensures that investors have adequate communication regarding their rights and any important details about the investment during this review period. This communication facilitates transparency and helps protect the investor's interests, given that they have the opportunity to reconsider their decision without penalty. Understanding this timeframe is crucial for compliance with regulations governing variable contracts and for ensuring that investors are fully informed of their options, which is integral to maintaining trust and transparency in the investment industry.