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SIE: Investment Companies & Packaged Products
SIE practice questionhardVariable Annuities

A key risk associated with variable annuities, but not with fixed annuities, is:

  1. AFixed periodic payments regardless of investment performance
  2. BThe client's investment return is not guaranteed and may fluctuate✓ Correct answer
  3. CPayments are insured by the FDIC
  4. DPrincipal is guaranteed by the insurance company
Explanation

Why BThe client's investment return is not guaranteed and may fluctuate

A is correct; variable annuities’ results depend on market performance. B is fixed annuity feature. C and D are untrue for variable annuities.

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