Which of the following statements regarding nonqualified annuities and their tax treatment is NOT correct?
A) Premiums are tax deductible.
B) Interest earnings accumulate tax deferred and are taxed when distributed.
C) Nonqualified annuities are LIFO contracts, meaning that the last money credited (interest earned) is the first money distributed in a withdrawal.
D) The 10% early withdrawal tax penalty is waived if the owner is disabled.
Ans: A) Premiums are tax deductible.
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One way for an investor to protect themselves when selling a stock short is to
A) not make the sale on margin. B) buy an offsetting amount of the same shares coincident with the short sale to perfectly hedge the transaction. C) issue a stop buy limit order at a price somewhere above the short sale price. D) An investor cannot protect against large losses in a short sale transaction.