Exercise

Indicate whether the listed item is a security or not a security.

1. 1. _____ A valuable antique musical instrument
2. 2. _____ A variable annuity
3. 3. _____ A term life insurance policy
4. 4. _____ A bond issued by a local school district
5. 5. _____ Interest in a collection of antique musical instruments
6. 6. _____ An option on commodities
7. 7. _____ A personal residence

Answers

1. 1. Not a security. Collectibles, such as antiques, are not considered to be securities.
2. 2. Security. Annuities without variable features are not considered to be securities. In contrast, variable annuities are securities.
3. 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.
4. 4. Security. All bonds are considered to be securities.
5. 5. Security. An interest in something, meaning a situati