LLQP Segregated Funds & Annuities · Component 2.1 · 30% of the exam
The 'valuation date' for a segregated fund transaction is:
- AThe maturity date of the guarantee, when the insurer values the contract to determine any top-up
- BThe client's birthday each year, when the insurer revalues the contract for the annual statement
- The business day on which NAV is calculated and applied to orders received before cut-off
- DThe last business day of the year, when the fund's income is allocated to contract holders
Correct answer: C) The business day on which NAV is calculated and applied to orders received before cut-off
Clients receive the next available NAV, not a known price. This is forward pricing.
Why the other options are wrong
- AMaturity is the guarantee date, not the transaction valuation date.
- BThe client's birthday has nothing to do with valuation dates.
- DMost funds value daily, not only at year-end.
Exam tip
Forward pricing: next NAV after the order.
Common mistake
Promising a client a specific unit price for a deposit.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
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