Answer: C. both investments grow tax-deferred
Explanation:
A mutual fund consist of the money gotten from investors for the investment in securities such as bonds, stocks, money market instruments, etc.
A variable annuity is refered to as a non-exempt security as the purchaser is the on who bears the investment risk
The following are true for the mutual funds and the variable annuities that are in the accumulation phase:
• Both are regulated a under the Investment Company Act of 1940.
• The underlying portfolios are managed
• The return to investors is dependent on the performance of the securities in the underlying portfolio.
It should be noted that the option that both the mutual fund and the variable annuity grow tax-deferred is incorrect.
