Your Client Bought a Variable Annuity Contract That Has a 5

Your client bought a variable annuity contract that has a 5% contingent deferred sales charge with a 7-year surrender period four years ago. He has been reading about bonus annuities and 1035 exchanges and has asked for your advice. You can tell him:

A) that it's a great idea, and you plan on how you're going to spend the unexpected income.
B) that although the exchange doesn't have any tax consequences, he'll be looking at a new, longer, surrender period.
C) that he'll have to pay the 5% deferred sales charge if he executes the exchange.
D) both B and C.