2026 Licensing & Certification Curricula (Securities, Cloud, IT, Real Estate, Bar & CPA) are now live
Official Practice ProblemFINRA Series 7 Blueprint: Function 2
← Prev Question (#s7-prep-series7-ch6-002)Next Question (#s7-prep-series7-ch6-004) →
Question #s7-prep-series7-ch6-003Function 2Moderate

Variable Annuities

A variable annuity has an Assumed Interest Rate (AIR) of 5%. If the separate account earns 7%, the annuitant's payment will:

Correct Choice: B

When the separate account performance exceeds the AIR, the annuitant's payment increases. The 7% return exceeds the 5% AIR, so payments increase.

Complete Analysis & Legal Rationale

When the separate account performance exceeds the AIR, the annuitant's payment increases. The 7% return exceeds the 5% AIR, so payments increase.

Distractor Autopsy (Why Other Options Are Traps)

FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:

Choice AIncorrect
Concept Trap

Does not match the governing securities rule described in the explanation.

Choice BCorrect
None

Matches the verified teaching point in the explanation.

Choice CIncorrect
Concept Trap

Does not match the governing securities rule described in the explanation.

Choice DIncorrect
Concept Trap

Does not match the governing securities rule described in the explanation.

Authorities & References:

Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.

Official SourceFINRA FINRA Series 7 Content Outline — General Securities Representative Examination (Series 7) Content Outline
🏛️

Regulatory Authority & Citations: Primary Legal Sources

Verified citations governing Question #s7-prep-series7-ch6-003 (FINRA Series 7 Content Outline)

To pass the FINRA Series 7, candidates must understand not just the calculation formulas, but the exact federal securities acts, SRO rulebooks, and statutory frameworks that enforce them. Review the primary authority records below:

FINRAFINRA Series 7 Content Outline— General Securities Representative Examination (Series 7) Content Outline

Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.

Read FINRA Official Rule

Ready to test all 125 questions under real FINRA exam timing?

Take our timed 3h 45m simulator with real-time pass/fail scoring at the 72% benchmark.

Launch Full 125-Question Mock Exam Simulator →