owing is a charge you will pay when you purchase a variable annuity? 16) - 16) Which of the following is a charge y A) Administrative fee. B) Mortality and expense risk charge. C) Fund expense. D) Surrender charge. E) All of these. of your net (after-tax) 17) A) 20% D) 50% E) 30% 18) A 17) A good rule of thumb is to limit installment payments to income. B) 60% 40% is an employer-sponsored retirement account, and participating in one is one 18) of the easiest ways to begin an investment program. A) TRA account B) 509(re) account C) 401(k) account D) 321(a) account E) 301(a) account 19) Speculative investments include all of the following except A) Precious metals. B) Savings accounts. C) Commodities. D) Precious stones. E) Options. 201 20) The potential return on any investment should A) Be guaranteed. B) Be directly related to the risk the investor assumes. Be inversely related to the risk of the investment. D) Be inversely related to the risk the investor assumes. E) Not have any relationship to the risk of any investment. 21) - 21) When choosing an investment, you should consider risk. The four primary risk components are A) Inflation, interest rate, business failure, market. B) Stock, interest rate, market, buying power. C) Business failure, inflation, buying power, stock. D) Buying power, inflation, interest rate, market. E) Market, bond, stock, inflation. 22) 22) Which of the following risks reduces your purchasing power! A) Interest rate risk B) Market risk C) Stock risk D) Business failure risk E) Inflation risk 23) 23) Which of the following risks deals with the possibility that bad management, unsuccessful products, or other factors will cause the business to be less profitable than originally anticipated? A) Inflation risk B) Market risk C) Interest rate risk D) Stock risk E) Business failure risk 24) - 24) Which of the following risks deals with fluctuations in the economy from a period of rapid expansion followed by a period of recession? A) Business failure risk B) Interest rate risk C) Market risk D) Inflation risk E) Stock risk 25) Inflation risk deals with A) A reduction in purchasing power. B) Changes in interest rates. C) Bad management and/or unsuccessful products. D) Political or social conditions. E) Predictable sources of income. 26) Business failure risk can be due to A) A reduction in purchasing power. B) Changes in interest rates. Bad management and/or unsuccessful products. D) Political or social conditions. E) Predictable sources of income. 27) Market risk is associated with fluctuations in the market due to A) A reduction in purchasing power. B) Changes in interest rates. C) Bad management and/or unsuccessful products. D) Economic conditions such as rapid expansion and recession. E) Predictable sources of income