Exercise
Choose if a Security or Not a Security
1. _____ A valuable antique musical instrument
2. _____ A variable annuity
3. _____ A term life insurance policy
4. _____ A bond issued by a local school district
5. _____ Interest in a collection of antique musical instruments
6. _____ An option on commodities
7. _____ A personal residence
Answers
1. Not a security. Collectibles, such as antiques, are not considered to be securities.
2. Security. Annuities without variable features are not considered to be securities. In contrast, variable annuities are securities.
3. Not a security. Because it is a fixed and non-variable type of insurance contract, a term life insurance policy is not an annuity.