Question 1

Which of the following statements regarding individual retirement accounts (IRAs) is (are) true?
I.If an individual's only income during the year is from investments,he or she cannot make an IRA contribution.
II.The funds in the IRA can be used to purchase life insurance on the owner.

Accepted Answer

A)  I only
B)  II only
C)  both I and II
D)  neither I nor IIE) A) and C)
F) A) and B)

Question 2

Rita is 66 years old.She earned $20,000 this year working part-time at a store and her modified adjusted gross income was $28,000.Rita is considering making a $3,000 contribution to her traditional IRA.Which of the following statements is true regarding this contribution?

Accepted Answer

A)  Rita cannot contribute to her traditional IRA because she is over age 65.
B)  Rita can make a $3,000 contribution to her traditional IRA,but it is not tax deductible.
C)  Rita can make a $3,000 contribution to her traditional IRA,but it is only partially tax deductible.
D)  Rita can make a $3,000 contribution to her traditional IRA,and it is fully tax deductible.E) None of the above
F) B) and C)

Question 3

Insurers offering variable annuities charge a number of expenses.One category of expenses is to pay the fund manager and to pay brokerage fees.This expense is the

Accepted Answer

A)  investment management charge.
B)  administrative charge.
C)  surrender charge.
D)  front-end load.E) A) and D)
F) A) and C)

Question 4

Which of the following statements is (are) true with regard to the inflation-indexed annuity option?
I.The initial monthly payment is lower than the initial payment a fixed annuity would have provided if purchased at the same age.
II.Periodic payments to the annuitant are adjusted for inflation.

Accepted Answer

A)  I only
B)  II only
C)  both I and II
D)  neither I nor IIE) A) and B)
F) A) and C)

Question 5

Which of the following is a characteristic of longevity insurance?

Accepted Answer

A)  payment of the face value of the policy at age 100
B)  forfeiture of the purchase price if the annuitant dies during the deferral period
C)  cash value can be borrowed or recouped through a nonforfeiture option
D)  high-cost annuity compared to other life annuitiesE) A) and D)
F) None of the above

Question 6

Which of the following statements is (are) true with respect to annuities?
I.Annuities are the opposite of life insurance.
II.The fundamental purpose of annuities is to replace lost income in case of premature death.

Accepted Answer

A)  I only
B)  II only
C)  both I and II
D)  neither I nor IIE) B) and C)
F) A) and B)

Exam 14: Annuities and Individual Retirement Accounts

Rita is 66 years old.She earned $20,000 this year working part-time at a store and her modified adjusted gross income was $28,000.Rita is considering making a $3,000 contribution to her traditional IRA.Which of the following statements is true regarding this contribution?

Correct Answer
verified

Which of the following statements is (are) true with regard to the inflation-indexed annuity option? I.The initial monthly payment is lower than the initial payment a fixed annuity would have provided if purchased at the same age. II.Periodic payments to the annuitant are adjusted for inflation.

Correct Answer
verified

Which of the following is a characteristic of longevity insurance?

Correct Answer
verified

Which of the following statements is (are) true with respect to annuities? I.Annuities are the opposite of life insurance. II.The fundamental purpose of annuities is to replace lost income in case of premature death.

Correct Answer
verified

Insurers offering variable annuities charge a number of expenses.One category of expenses is to pay the fund manager and to pay brokerage fees.This expense is the

Correct Answer
verified

Which of the following statements regarding individual retirement accounts (IRAs) is (are) true? I.If an individual's only income during the year is from investments,he or she cannot make an IRA contribution. II.The funds in the IRA can be used to purchase life insurance on the owner.

Correct Answer
verified

Exam 14: Annuities and Individual Retirement Accounts

Rita is 66 years old.She earned $20,000 this year working part-time at a store and her modified adjusted gross income was $28,000.Rita is considering making a $3,000 contribution to her traditional IRA.Which of the following statements is true regarding this contribution?

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true with regard to the inflation-indexed annuity option? I.The initial monthly payment is lower than the initial payment a fixed annuity would have provided if purchased at the same age. II.Periodic payments to the annuitant are adjusted for inflation.

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of longevity insurance?

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true with respect to annuities? I.Annuities are the opposite of life insurance. II.The fundamental purpose of annuities is to replace lost income in case of premature death.

Correct AnswerverifiedShow Answer

Insurers offering variable annuities charge a number of expenses.One category of expenses is to pay the fund manager and to pay brokerage fees.This expense is the

Correct AnswerverifiedShow Answer

Which of the following statements regarding individual retirement accounts (IRAs) is (are) true? I.If an individual's only income during the year is from investments,he or she cannot make an IRA contribution. II.The funds in the IRA can be used to purchase life insurance on the owner.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified