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SEGREGATED FUNDS AND ANNUITIES – CHAPTER 2 SEGREGATED FUNDS TEST
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SEGREGATED FUNDS AND ANNUITIES – CHAPTER2 SEGREGATED FUNDS TEST
A segregated fund is sometimes referred to as what? - ANSWER An Individual
Variable Contract, or IVIC
What investment fund would be best suited for a short-term goal, such as
purchasing a house? Why? - Answer Money Market Fund. 95% of net assets
must be held in cash or cash equivalents such as treasury bills, short-term
government bonds, and so on. This is the lowest-risk fund type, suitable for
short-term investments or as an emergency fund. (Note: Due to the low amount
of risk, a money market fund has a lower predicted return than other fund
types).
Which memory aid is used to recall the risk level associated with each fund
type, from lowest to highest (in general)? - ANSWER Mickey Mouse's older
brother dated every wealthy singer.
Name each sort of fund, ranked from low to high risk. - ANSWER Money
Market Fund
Mortgage Fund
Bond fund (fixed income)
Balanced Fund
Dividend Fund
Equity Fund
Real Estate Fund
Speciality Fund
Which of the following funds has the highest risk? Fixed Income, Real Estate,
Dividend, or Equity Funds? - ANSWER Real Estate Fund (To qualify as a real
estate fund, at least 90% of the fund's assets must be invested in residential,
retail, commercial, or industrial properties. This sort of fund earns rental
revenue on properties, has the potential to produce capital gains income on
properties, and may earn interest income if it also invests in mortgages. In an
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