Final answer:
The dollar value of an annuity unit is primarily based on C) the return on the equity portfolio supporting the annuity.
Step-by-step explanation:
An annuity is a financial product that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means to secure a steady cash flow for an individual during their retirement years. The value of an annuity unit is not fixed but fluctuates based on the performance of the investment portfolio underlying the annuity contract. This portfolio typically consists of a mix of stocks, bonds, and other securities. As the value of these investments rises or falls, so does the value of the annuity units.
It's important to understand that the value of annuity units does not depend on the total number of units in circulation (A), the nation's gross domestic product (B), or a formula from the SEC (D). Instead, annuity providers invest the contributions from the annuities into various investments, and the returns from these investments determine the value of the annuity units.