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Question
An insurance company plans to sell annuities to investors. Based on actuarial calculations, an investor has a 15-year life span, and he wants a $30,000-per-year annuity, payable at the end of each year. If the insurance company uses a 4% assumed investment rate, how much should the annuity cost?
A. $296,928
B. $312,236
C. $333,552
D. $353.982
Answer
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Related questions
Q:
Which of the following does not approximate the performance of a buy-and-hold portfolio strategy?
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B. A price-weighted index
C. A value-weighted index
D. All of these options (Weights are not a factor in this situation.)
Q:
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Q:
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B. maintaining approximately the same proportions of a portfolio in each asset class over time
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B. $37,500
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Q:
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Q:
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Q:
The asset universe is the _____________________.
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Q:
An investor is looking at different retirement investment choices, and he is willing to accept one with upside potential even if that means sacrificing certainty. Which of the following will he most likely select?
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Q:
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Q:
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A. return requirement
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Q:
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What is the amount of the total contribution to his 403b if John contributes 5% of his own money?
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Q:
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Q:
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Q:
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Q:
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Q:
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C. younger workers
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Q:
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Q:
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Q:
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A. traditional retirement plan
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Q:
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Q:
A typical hedge fund incentive bonus is usually equal to ________ of investment profits beyond a predetermined benchmark index.
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Q:
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Q:
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Q:
You manage a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per quarter. Assume the risk-free rate is 2% per quarter and the current value of the S&P 500 Index is 1,200. You want to exploit the positive alpha, but you are afraid that the stock market may fall and you want to hedge your portfolio by selling 3-month S&P 500 future contracts. The S&P contract multiplier is $250.
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A. 0
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D. The answer cannot be determined from the information given.