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Question
An insurance company plans to sell annuities to investors. Based on actuarial calculations, an investor has a 20-year life span, and she wants a $50,000-per-year annuity, payable at the end of each year. If the insurance company uses a 3% assumed investment rate, how much should the annuity cost?
A. $696,928
B. $743,874
C. $833,552
D. $953.982
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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A. investing in the stock of companies that are price takers
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Q:
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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:
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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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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.