Investment Vehicle Characteristics Flashcards
(3 cards)
1
Q
What happens when an annuitant terminates an annuity during the accumulation phase?
A
an annuity can be terminated anytime during the accumulation period for its surrender value - the current value of the assets held in the separate account less any surrender charges
2
Q
What is the nominal yield?
A
the coupon rate of a bond
3
Q
What is a Certificate of Deposit (CD)?
A
a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time
safer & more conservative investment than stocks and bonds- offer lower opportunity for growth but with a non-volatile, guaranteed rate of return
