Investment Vehicles Flashcards
The _________ is guaranteed in an equity indexed annuity?
A minimum rate of return
What does the term “offset” mean?
To be bought or sold
True or false: hedge funds charge 12 B – 1 fees
False
Maintaining a fair and orderly market, and acting as a broker when executing orders for other brokers, is the function of who?
The specialist
True or false: variable life insurance and variable annuities must be sold with the prospectus
True
True or false: a hedge fund qualifies to Pass thru both income and losses.
True
Do variable life insurance policies have guaranteed minimum death benefit?
Yes.
What are participants called in a limited liability company?
Members
Which type of Business entity calls its participants “members”?
LLC
What is an undivided interest in equity?
It is the gains from current and past years that have not been distributed or passed-through to shareholders.
For a nonqualified annuity how is the initial withdrawal taxed?
LIFO
If you withdraw some of the cash value in a variable life insurance policy how will the withdrawal be taxed?
Any withdrawn of the cash value from a life insurance policy is considered a return of premiums first, which would be tax-free.
If a loan is taken against the cash value is a variable annuity life insurance product how is it taxed?
The loan against the principal will be tax-free.
What is a partial surrender of variable life insurance?
A removal of cash from the policy.
Partial surrenders of variable annuities are subject to ________ taxation
LIFO
Partial surrenders of a Variable life insurance policy are subject to ______ taxation.
FIFO
T or F: For Variable annuity life insurance product If the contract owner dies the beneficiary receives any proceeds tax free
True
T or F: For a Variable annuity product If the contract owner dies the beneficiary receives any proceeds tax free.
False
When are 12b–1 fees assessed by investment companies?
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.
The most common methods of measuring Index performance are the:
Point to point
Annual reset
High watermark
In equity indexed annuity would use which method to credit the change in investment value?
Point to point method
The AIR of the variable Annuity contract is set when:
The contract is annuitized.
Which annuity payout option usually Results in the largest periodic payment?
Life annuity.
