Chapter 3 True or False Flashcards
Define Assumed Interest Rate
an expected rate at which the annuitant and insurance company agree that the annuity will grow annually
How many days does a mutufal fund have to redeem shares after it receives a customer’s redemption request?
7
what’s the objective of a balanced fund
to achieve lower volatility than an equity fund and higher returns than a bond fund
Using LIFO method for taxing annuities,
earnings must be taxed upon withdrawal but the principal can be withdrawn tax-free
Using LIFO method for taxing annuities,
earnings must be taxed upon withdrawal but the principal can be withdrawn tax-free
Define Exchange-traded Notes
unsecured debts that promise to pay an amount based on the performance of an index.
Don’t pay interest
Define late trading
filling orders made after the close of trading on a given day at the day’s NAV
What type of annuities are subeject to required minimum distributions
tax-qualified variable annuities
Is an equity-indexed annuity a security?
no
Because payments in a fixed annuity are fixed are they subject to purchasing power risk/
yes
What % of an investment company BOD must be non-interested persons
40% of an investment company’s BOD must be non-interested persons
Why is ‘selling dividends’ prohibited?
it’s a process where a rep sells mf shares to an investor right before the fund makes a distribution and whne that happens, the per-share value of the shares will drop devaluing the purchaser’s investment right after he makes a purchase
tax-qualified variable annuities are funded with money that hasn’t yet been taxed
T
What is NAV equal to
the FMV of the securities in the fund minus the fund’s liabilities
Name the two phases of a variable annuity
accumulation and payout
