Under the Investment Company Act of 1940, there are three types of investment companies: face-amount certificate companies, unit investment trusts, and management companies. The two management companies are generally managed actively by a portfolio manager. The difference is just that you redeem the open-end shares for the NAV while you have to sell your closed-end shares for whatever the market will give you, often a discount to the NAV. The UIT (unit investment trust), unlike the open-/closed-end funds, is just a fixed trust of income-producing securities. It holds bonds or preferred stock usually, and the investors holding units earn a fixed stream of income until the trust is terminated, the unit values paid out to the unit holders. If interest rates rise, unit values will drop in value, but the income that the trust earns will stay the same. In a management company (open- or closed-end fund), the portfolio manager could take advantage of a rise in interest rates by buying new bonds paying higher yields. A UIT, however, is not managed. The investments are selected. Often the bond portfolio would terminate when all the bonds mature. Preferred stock, which is generally perpetual, would only be turned into cash if it were called by the issuer.
I'm not sure that UITs will make much of an appearance on the Series 7, but they're on the outline, and, therefore, you could easily see one or two questions. As always, you have to know just enough information about a vast array of topics to pass the Series 7 exam.