Final answer:
A Pooled (life) income fund is an example of a split-interest agreement. Other financial terms like finance company, life insurance company, mutual fund, pension fund, and REITs are defined with examples provided for each.
This correct answer is D)
Step-by-step explanation:
Among the options given, an example of a split-interest agreement is a Pooled (life) income fund. In such an arrangement, a donor contributes assets to a fund held by a charitable organization, and in return, the donor or designated beneficiaries receive income for life or for a term of years based on a fixed percentage of the fund's value, which is assessed annually.
After the income interest ends, the remaining principal goes to the charitable organization.
A finance company is a type of business that makes loans to individuals and businesses. Unlike a bank, a finance company does not accept deposits. An example is a company that offers auto loans, such as GM Financial.
A life insurance company underwrites policies that pay a benefit upon the death of the insured or after a set period. For example, Prudential Financial offers various life insurance products.
A mutual fund is an investment vehicle that pools money from many investors to purchase securities like stocks and bonds. Vanguard Group is an example of a company that offers mutual funds.
A pension fund is an investment pool set up by an employer to provide retirement income to employees. The California Public Employees Retirement System (CalPERS) is an example of a pension fund.
Real estate investment trusts (REITs) are companies that own or finance income-producing real estate across a range of property sectors. An example of a REIT is the Simon Property Group, which owns malls and shopping centers.
This correct answer is D)