which one of the following is an example of an annuity? course hero

What is an annuity?

Nov 02, 2018 · A. The present value of Annuity A is equal to the present value of Annuity B. B. Annuity B will pay one more payment than Annuity A will. C. The future value of Annuity A is greater than the future value of Annuity B. D. Annuity B has both a higher present value and a higher future value than Annuity A. E. Annuity A has a higher future value ...

Why would a client purchase an immediate annuity?

Which of the following situations is an example of a general annuity? a. ₱ 5,000 deposited every month for 5 years at 8% per year compounded annually b. ₱ 5,000 deposited every six months for 5 years at 8% per year compounded semi-annually c. ₱ 5,000 deposited every three months for 5 years at 8% per year compounded quarterly d. ₱ 5,000 deposited every year for 5 years at 8% …

Why do annuities have variable returns?

Finance questions and answers. Which of the following is an example of an annuity? O An investment in a certificate of deposit (CD) A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time Katie had a high monthly food bill before she decided to cook at home every day in order to reduce her expenses.

What type of annuity should a 60 year old woman consider?

Luana's savings are an example of an annuity. How much will she $3,482.06 $7,249.48 $5,453.15 Q $6,415.47 If Luana deposits the money at the beginning of every year and everything else remains the same, she will save by the end of five years. Previous question Next question.

What is the most important factor to be used in determining their suitability for a variable annuity?

Of the answers shown, the customer's tax status is the most important factor to be used in determining their suitability for a variable annuity.

Who is the annuitant in an annuity?

The person whose life an annuity contract is based upon is known as the "annuitant." Although the contract owner is often also the annuitant, that is not always the case.

What is the opposite of life insurance?

Remember, annuities are the opposite of life insurance. When an annuitant buys a life annuity, they are betting that they will outlive the insurer's annuity tables and the insurer is betting that they won't. Based upon the law of large numbers, the insurer will take the money of their life annuitants who die too soon and pay it to those who live too long.

How long does a period certain annuity last?

A.) A period certain annuity guarantees that payments will be made to the annuitant for a specified period of time, 15 years in this case. For example, if the annuitant died after 10 years, the beneficiary would receive payments for five years. However, although the beneficiary disappears when the period certain ends, if the annuitant continues to live, payments would continue on until their death.

How often do you get a check for joint life?

When the Joint Life Annuity payout option is selected the insurer will send a check to the husband and wife once a month until the first person dies. Regardless of who dies first (the husband or wife), monthly payments will be discontinued at that point.

What is surrender charge on an annuity?

Most annuities are subject to surrender charges, which are levied by the insurer during the early years of the contract, as well as premature distribution penalties, which are levied by the IRS upon cash surrender prior to age 59 1/2. Surrender charges usually apply on a declining basis and will gradually disappear over a period of time. Their purpose is to discourage customers from investing in annuities on a short-term basis.

What is fixed annuity?

Fixed annuities guarantee not only the amount of payments but also the interest rate paid on the invested capital. Each fixed annuity contract specifies an interest rate, for example 5%. If the portfolio earns only 4%, the company is still obligated to pay the 5% rate.

What happens to an annuity if the annuitant dies?

An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. this type of annuity is called:

What is an equity indexed annuity?

(A life annuity offers protection against the risk of living longer than anticipated.) Equity indexed annuities are invested in which of the following: S&P 500.

Which part of total risk should affect asset prices and returns?

III. Systematic risk is the only part of total risk that should affect asset prices and returns.

What is the purpose of investing in three companies all within the same industry?

B. making an investment in three companies all within the same industry will greatly reduce the systematic risk.

How many unrelated securities can be invested in diversifiable risks?

I. Diversifiable risks can be largely eliminated by investing in thirty unrelated securities.