Which investment option is characterized as being regulated by the SEC and classified as securities?

The correct answer is Unit Investment Trust. This investment option is specifically classified as a security and is regulated by the U.S. Securities and Exchange Commission (SEC). A Unit Investment Trust (UIT) is a type of investment company that offers a fixed portfolio of securities, which can include stocks and bonds, for a specified period. Investors buy shares in the trust, which represent ownership of the portfolio, and the UIT typically matures after a set period.

The regulation by the SEC ensures that UITs follow strict rules regarding the information they must disclose, giving investors protection and transparency about their investments. This classification as a security also allows investors to trade shares in the UIT, subject to the rules governing such transactions, further solidifying its status within the securities framework.

In contrast, fixed annuities and life insurance products like whole life insurance and term life insurance are not classified as securities. Fixed annuities are insurance contracts providing guaranteed returns, while whole and term life insurance focus primarily on risk management and protection rather than investment returns. These products are regulated under state insurance laws rather than federal securities laws, which is a key distinction in understanding investment classifications.