Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Who assumes the investment risk in a variable annuity?

The insurance company

The annuitant's employer

The annuitant (investor)

The federal government

Previous problemNext problem

Verified step by step guidance

Understand the concept of a variable annuity: A variable annuity is a type of investment product offered by insurance companies that allows the investor (annuitant) to allocate funds into various investment options, such as mutual funds. The returns are not guaranteed and depend on the performance of the chosen investments.

Identify the key parties involved: In a variable annuity, the primary parties are the insurance company (which provides the product), the annuitant (the investor who purchases the annuity), and sometimes the annuitant's employer (if the annuity is part of a retirement plan).

Clarify the role of the annuitant: The annuitant assumes the investment risk because the returns on the variable annuity depend on the performance of the underlying investments. If the investments perform poorly, the annuitant may experience losses or lower returns.

Eliminate incorrect options: The insurance company does not assume the investment risk in a variable annuity; it only provides the product and may charge fees. The federal government does not assume the risk either, as it is not involved in the investment performance. The annuitant's employer may facilitate the annuity but does not bear the investment risk.

Conclude that the correct answer is the annuitant (investor), as they are the one directly impacted by the performance of the investments in the variable annuity.