An investment alternative in the form of an annuity that is similar to a mutual fund but that is less risky as it provides a certain degree of insurance to the investor is a (an) __________
A)segregated fund.
B)government bond.
C)guaranteed investment certificate.
D)government stock.
E)option fund.

Question

Quizplus · Accepted Answer

A segregated fund is an investment alternative that is similar to a mutual fund, but with the added benefit of insurance protection. The investor has access to a range of investment options, while the insurance feature provides downside protection, which makes it less risky than a mutual fund. A guaranteed minimum withdrawal benefit (GMWB) is a type of insurance that provides a minimum level of income from the investment, even if the value of the fund decreases. Therefore, a segregated fund is a good choice for investors who want to enjoy the benefits of market participation while minimizing the risks.

An Investment Alternative in the Form of an Annuity That