LUTCF Course 2 Practice Questions - LUTCF Course 2 Investment And Protection Products Exam

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A fixed indexed annuity credits interest based on the performance of an external index but limits the upside with a cap and protects against loss with a floor. What is the typical floor on an indexed annuity?

A guaranteed 8% annual credit The full negative return of the index A floor equal to the index dividend yield 0%, meaning the contract is not credited a negative return in a down-index year

Correct Answer:

0%, meaning the contract is not credited a negative return in a down-index year

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