Which type of investment company issues face-amount certificates and promises to pay a stated sum at a fixed date more than 24 months from issuance, possibly with periodic installments?

• A. Face-amount certificate company
• B. Unit Investment Trust
• C. Management Company
• D. Broker-dealer

Answer: (A)

Face-amount certificates are issued by an investment company and promise to pay a fixed sum at a specified future date, typically more than 24 months from issuance, and may include periodic installments. This guaranteed payout at a set date is the defining feature.

A Unit Investment Trust, by contrast, sells units representing a fixed portfolio of securities and usually terminates at a predetermined date, without promising a single fixed payout at a distant date. A management company (mutual fund) issues redeemable shares in a managed portfolio with value that fluctuates, not a guaranteed future sum. A broker-dealer is a firm that trades securities and is not an investment company issuing such certificates.