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One difference between investing in a variable annuity and in a mutual fund is that:
Suggested Answer: B
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A difference between investing in a variable annuity and in a mutual fund is that the premiums invested in a variable annuity grow tax-deferred. The variable annuity contract does not guarantee a minimum rate of return on your investment, and the fees associated with a variable annuity contract are significantly higher than those associated with an investment in a mutual fund. Owners of variable annuity contracts have voting rights, just like mutual fund investors.
11 comments · newest first
TE
Temeka
1 year ago
C seems off, mutual fund fees vary widely.
CA
Cammy
1 year ago
D is true, no voting rights with annuities.
MO
Mozell
1 year ago
Wait, I thought mutual funds had lower fees? This is surprising!
SU
Suzi
1 year ago
I disagree, A is misleading. Not all variable annuities guarantee returns.
SH
Shawnee
1 year ago
B is correct! Tax-deferred growth is a big plus.
SO
Sophia
1 year ago
I remember something about voting rights, but I can't quite remember how they differ between mutual funds and variable annuities.
WE
Wei
1 year ago
I feel like the fees for mutual funds can be pretty high, but I can't recall if they're higher than those for variable annuities.
YU
Yun
1 year ago
I practiced a question similar to this, and I believe the tax-deferred growth is a key feature of variable annuities.
CY
Cyril
1 year ago
I think I remember that variable annuities have some tax advantages, but I'm not sure if that's the main difference.
AL
Alverta
1 year ago
Hmm, this one seems tricky. I'll need to think carefully about the details of the scenario to determine the right type of penetration testing.
JA
Jacklyn
1 year ago
I remember learning about how NGFWs can identify applications on any port, that's a key difference from legacy firewalls.