An annuity product linked to a market-related rate of return is called
A. a fixed annuity
B. an indexed annuity Correct
C. a deferred annuity
D. a tax-sheltered annuity
Rationale: An indexed annuity is designed to provide returns linked to a specific market index, allowing for potential growth based on market performance while offering some downside protection.
A fixed annuity guarantees a set return, unaffected by market changes, which does not align with the concept of being market-related. A deferred annuity refers to a product where payouts begin at a later date, but it doesn’t inherently involve market linkage. A tax-sheltered annuity focuses on tax advantages rather than market performance, making it unrelated to the question regarding market-related returns.
