Multiple Choice
In analyzing a company's current business portfolio, which of the following tools is most commonly used to evaluate the performance and strategic position of its investments in securities?
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7. Receivables and Investments
Introduction to Investments in Securities
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For which of the following needs are traditional deferred annuities most commonly used?
A
To maximize short-term capital gains
B
To provide income during retirement after a period of accumulation
C
To insure against property loss
D
To offer immediate liquidity for short-term expenses
Verified step by step guidance1
Understand the concept of a deferred annuity: A deferred annuity is a financial product designed to provide income at a future date, typically during retirement, after an accumulation phase where contributions grow tax-deferred.
Analyze the options provided in the question: Evaluate each option to determine which aligns with the primary purpose of a deferred annuity.
Option 1: 'To maximize short-term capital gains' - This does not align with the purpose of deferred annuities, as they are designed for long-term income rather than short-term gains.
Option 3: 'To insure against property loss' - Deferred annuities are not insurance products for property loss; they are retirement-focused financial instruments.
Option 4: 'To offer immediate liquidity for short-term expenses' - Deferred annuities are not designed for immediate liquidity; they are intended to provide income after a period of accumulation, making Option 2 the correct answer.
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