Question

regarding equity-indexed annuities, which of the following statements is true? a if the index declines in value, there's no floor as to how much an investor may lose. b if the index increases in value, there's no limit as to how much an investor may gain. c if the annuitant withdraws money before the surrender period is over, she's required to pay a surrender fee. d

Answer 1

The correct statement regarding equity-indexed annuities is that if the index increases in value, there's no limit as to how much an investor may gain. Therefore, the correct option is B.

Step-by-step explanation:

The correct statement regarding equity-indexed annuities is:

b) If the index increases in value, there's no limit as to how much an investor may gain.

Equity-indexed annuities are a type of annuity that link their performance to the performance of a stock market index. If the index increases in value, the annuity allows the investor to participate in the gains without a limit. However, if the index declines, the investor is typically protected by a floor that ensures they do not lose any principal.