Practice Quiz

FINRA Series 6

Category - Series 6

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One difference between investing in a variable annuity and in a mutual fund is that:
  1. the variable annuity guarantees a minimum rate of return on your investment.
  2. the premiums invested in a variable annuity grow tax-deferred.
  3. the fees and charges associated with investing in a mutual fund are much higher than those associated with investing in a variable annuity contract.
  4. Mutual fund investors have voting rights; owners of variable annuity contracts have no voting rights.
Explanation
Answer: B - 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.
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