SIE Exam Practice Question 874
Question: 874
Which of the following is a contract between an investor and an issuer in which the issuer guarantees payment of a stated sum to the investor at some set date in the future? In return for this future payment, the investor agrees to pay the issuer a set amount of money either as a lump sum or in periodic installments.
Correct Answer: B
Explanation:
An FAC (face-amount certificate) is a contract between an investor and an issuer in which the issuer guarantees payment of a stated sum to the investor at some set date in the future. In return for this future payment, the investor agrees to pay the issuer a set amount of money either as a lump sum or in periodic installments.
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