Multiple Choice
What is the primary risk associated with taking a variable rate loan?
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7. Receivables and Investments
Introduction to Investments in Securities
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Which of the following products requires a securities license to sell?
A
Term life insurance
B
Fixed annuities
C
Mutual funds
D
Whole life insurance
Verified step by step guidance1
Step 1: Understand the concept of securities licenses. A securities license is required to sell financial products that are considered investments, such as stocks, bonds, mutual funds, and other investment vehicles.
Step 2: Analyze the products listed in the question. Term life insurance, fixed annuities, and whole life insurance are primarily insurance products and do not require a securities license to sell. Mutual funds, however, are investment products and do require a securities license.
Step 3: Clarify the distinction between insurance products and investment products. Insurance products provide financial protection against risks, while investment products are designed to grow wealth over time and are regulated by securities laws.
Step 4: Confirm that mutual funds are regulated by securities laws and require a securities license to sell. This is because mutual funds pool money from investors to purchase a diversified portfolio of stocks, bonds, or other securities.
Step 5: Conclude that among the options provided, mutual funds are the product that requires a securities license to sell.
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