Investment Companies and Packaged Products Flashcards
6 cards from real SIE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Investment Companies and Packaged Products flashcards as text
Variable life insurance differs from whole life insurance primarily because:
Answer: Variable life cash value depends on investment subaccount performance
Variable life insurance ties the policy's cash value to investment subaccounts, so its value fluctuates with market performance.
What is the accumulation phase of an annuity?
Answer: The period during which premiums are paid and the account value grows
The accumulation phase is when the investor contributes money and the annuity value grows before distributions begin.
Which regulatory body has jurisdiction over variable annuities and variable life insurance products?
Answer: Both the SEC and FINRA, as well as state insurance regulators
Variable products are considered both securities and insurance, so they fall under SEC/FINRA jurisdiction as well as state insurance regulation.
A 529 plan is primarily used to save for:
Answer: Education expenses with tax-advantaged growth
529 plans are state-sponsored education savings accounts where contributions grow tax-free and withdrawals for qualified education expenses are tax-free.
What is a 'fund of funds'?
Answer: A mutual fund that holds shares of other mutual funds or ETFs
A fund of funds is a pooled investment that allocates capital across multiple underlying funds rather than directly in securities.
Which type of investment company continuously offers shares and redeems them at NAV?
Answer: Open-end management company (mutual fund)
Open-end management companies (mutual funds) issue new shares and redeem existing shares at NAV on any business day.