A fixed indexed annuity is issued by an insurance company authorized to do business in State Q. The contract guarantees principal and credits interest using an equity-index formula. Under the USA, is the contract a security?

1. AYes, because any return tied to an equity index makes an annuity a security
2. BYes, because all annuities are securities
3. CNo, because the described contract is a fixed insurance annuity✓ Correct answer
4. DNo, but only if the insurer is not publicly traded

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