Question

All of the following statements are TRUE about variable annuities EXCEPT: (A) Monies invested are professionally managed in accordance with the objective of the holder. (B) Variable annuities protect the investor against capital loss. (C) The portfolio can consist of shares of other mutual funds. (D) Changes to the investment objective require a majority vote of the shareholders.

Answer 1

Answer:

The correct answer is B

Explanation:

Variable annuity is the kind of the annuity contract or an agreement, the value of which could vary or changes grounded on the performance of the underlying portfolio of the mutual funds.

The annuities differ from those of the fixed annuities, which provide the guaranteed as well as particular return.

Variable annuity is both a securities as well as an insurance product. So, the annuitant assumes that the investment risk of this annuity and will not be protected against the capital losses of the insurance company.