Investment Vehicles

Question 1

The _________ is guaranteed in an equity indexed annuity?

Answer 1

A minimum rate of return

Question 2

What does the term “offset” mean?

Answer 2

To be bought or sold

Question 3

True or false: hedge funds charge 12 B – 1 fees

Answer 3

False

Question 4

Maintaining a fair and orderly market, and acting as a broker when executing orders for other brokers, is the function of who?

Answer 4

The specialist

Question 5

True or false: variable life insurance and variable annuities must be sold with the prospectus

Answer 5

True

Question 6

True or false: a hedge fund qualifies to Pass thru both income and losses.

Answer 6

True

Question 7

Do variable life insurance policies have guaranteed minimum death benefit?

Answer 7

Yes.

Question 8

What are participants called in a limited liability company?

Answer 8

Members

Question 9

Which type of Business entity calls its participants “members”?

Answer 9

LLC

Question 10

What is an undivided interest in equity?

Answer 10

It is the gains from current and past years that have not been distributed or passed-through to shareholders.

Question 11

For a nonqualified annuity how is the initial withdrawal taxed?

Answer 11

LIFO

Question 12

If you withdraw some of the cash value in a variable life insurance policy how will the withdrawal be taxed?

Answer 12

Any withdrawn of the cash value from a life insurance policy is considered a return of premiums first, which would be tax-free.

Question 13

If a loan is taken against the cash value is a variable annuity life insurance product how is it taxed?

Answer 13

The loan against the principal will be tax-free.

Question 14

What is a partial surrender of variable life insurance?

Answer 14

A removal of cash from the policy.

Question 15

Partial surrenders of variable annuities are subject to ________ taxation

Answer 15

LIFO

Question 16

Partial surrenders of a Variable life insurance policy are subject to ______ taxation.

Answer 16

FIFO

Question 17

T or F: For Variable annuity life insurance product If the contract owner dies the beneficiary receives any proceeds tax free

Answer 17

True

Question 18

T or F: For a Variable annuity product If the contract owner dies the beneficiary receives any proceeds tax free.

Answer 18

False

Question 19

When are 12b–1 fees assessed by investment companies?

Answer 19

As shares are held. Fee is expressed as an annual percentage of total net assets, it is imposed pro Radde for every day that the investor holds the shares.

Question 20

The most common methods of measuring Index performance are the:

Answer 20

Point to point
Annual reset
High watermark

Question 21

In equity indexed annuity would use which method to credit the change in investment value?

Answer 21

Point to point method

Question 22

The AIR of the variable Annuity contract is set when:

Answer 22

The contract is annuitized.

Question 23

Which annuity payout option usually Results in the largest periodic payment?

Answer 23

Life annuity.