Customer AccountsQuestion 86 of 110
A 72-year-old retiree needs to draw income from a $60,000 lump sum within the next 12 months and has no other liquid savings. Which recommendation is least suitable?
a.A short-term bond fund
b.A money market fund
c.A conservative balanced fund with a small equity allocation
d.A deferred variable annuity with a seven-year surrender charge schedule
Explanation
Locking the customer's only liquid money into a contract with a long surrender period directly conflicts with a one-year liquidity need and would likely trigger surrender charges. The other choices keep the money accessible with varying degrees of price risk. Liquidity needs and time horizon are central suitability factors, especially for older investors.
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