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Variable annuities must be sold with _____, are a _____ UIT, and can be sold with or without a sales charge.

A) A prospectus; closed-end; without.
B) A private placement memorandum; open-end; with.
C) A statement of risk; fixed-income; without.
D) A health insurance policy; real estate; with.

1 Answer

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Final answer:

Variable annuities must be sold with a prospectus, are close-end option (a) UITs, and can be sold with or without a sales charge. The prospectus provides essential investment information to investors.

Step-by-step explanation:

Variable annuities must be sold with a prospectus, are a close-end Unit Investment Trust (UIT), and can be sold with or without a sales charge. The correct answer to this question is A) A prospectus; closed-end; without. However, it is important to note that variable annuities are open-end investments, not closed-end, as they allow for continuous purchase and redemption of their units by investors.

The requirement of a prospectus is crucial because it provides investors with detailed information about the investment product, including its objectives, risks, charges, and expenses. Furthermore, variable annuities are not sold with a health insurance policy or real estate, nor are they considered a fixed income or a real estate investment.

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