Final Exam 2

Question 1

If Jane Brown annuitizes her non-qualified variable annuity, how will the series of payments be taxed?

Answer 1

Part of each payment is taxable earnings, and part is a tax free cost basis

Question 2

When investing in a variable annuity, investors would be MOST concerned with which risk?

Answer 2

Investment risk

Question 3

When can an issuer use an omitting or summary prospectus?

Answer 3

With sales of investment company securities and variable contracts

Question 4

What describes a strong form efficient market?

Answer 4

All public and private info is reflected in securities prices

Question 5

Which form of efficiency asserts that using technical analysis in identifying securities which may be undervalued is of no benefit?

Answer 5

Weak form efficiency

Question 6

Are futures or forward contracts standardized?

Answer 6

Futures