You are explaining how a variable annuity functions to one of your clients. Which of the following statements is true? OA) Withdrawals are always federal income tax-free. B) Growth inside the annuity is taxed annually. C) The growth in the variable annuity is guaranteed. D) The rates of return may fluctuate depending on how the account value is invested.

You are explaining how a variable annuity functions to one of your clients. Which of the following statements is true? OA) Withdrawals are always federal income tax-free. B) Growth inside the annuity is taxed annually. C) The growth in the variable annuity is guaranteed. D) The rates of return may fluctuate depending on how the account value is invested.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 10FPE

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You are explaining how a variable annuity functions to one of your clients. Which of the following statements is true?
A) Withdrawals are always federal income tax-free.
B) Growth inside the annuity is taxed annually.
C) The growth in the variable annuity is guaranteed.
D) The rates of return may fluctuate depending on how the account value is invested.

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