Which of the Following Is a Correct Statement About Annuities

When an annuity is written whose life expectancy is taken into consideration. The cash flows for an annuity due must all occur at the ends of the periods.

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A perpetuity comprised of 100 monthly payments is worth more than an annuity comprised of 100 monthly payments given an interest rate of 12 percent compounded monthly.

. The number of annuity units a client redeems never changes Mr. The future value of an annuity decreases as the interest rate increases. If unspecified you should assume an annuity is an annuity due.

Series of payments at fixed intervals guaranteed for a fixed number of years or the lifetime of one or more individuals. Some of the cash flows shown on a time line can be in the form of annuity payments but none can be uneven amounts. A life annuity with guaranteed minimum payments ensures that the annuitant.

They are a type of life insurance D. Finite but annuities are not. Correct option is A The true statement about annuity is I t i s s e q u e n c e o f e q u a l i n s t a l m e n t s.

Time lines can be constructed for annuities where the payments occur at either the beginning or the end of the periods. An annuity is a series of equal payments occurring at equal period of time. Athey may be established as revocable trusts.

The present value of a perpetuity cannot be computed but the future value can. Series of payments at fixed intervals guaranteed for a fixed number of years or the lifetime of one or more individuals. All of the following statements concerning annuities are correct EXCEPT.

The pure life annuity is ideal for the person who needs maximum income spread out over a lifetime and has several living dependents to whom he or she wishes to leave assets. An annuity due has payments that occur at the beginning of each time period. Which of the following statements about the present value of an annuity is CORRECT.

Pick up the correct statement from the following. Which one of the following statements related to annuities and perpetuities is correct. Pick up the correct statement from the following.

An annuity is a serious of equal payments occurring at equal period of time. They use the same mortality tables as life insurance C. If unspecified you should assume an.

Jones wants a source of retirement income that is stable but that also could offer some protection against purchasing power risk in. Some of the cash flows shown on a time line can be in the form of annuity payments but none can be uneven amounts. Annuity is called an equal payment or uniform payment series.

An ordinary annuity has a greater PV than an annuity due if they both have the same periodic payments discount rate and time period. All of the following statements regarding charitable remainder annuity trusts CRATs and charitable remainder unitrusts CRUTs are CORRECT except. Which of the following statements is CORRECT.

Cthe remainder interest at inception must be greater than. The true statement about annuity is Itissequenceofequalinstalments. C An annuity is a stream of N equal cash flows paid at regular intervals.

Annuity is called an equal payment or uniform payment series. Which one of the following statements concerning annuities is correct. D Most car loans mortgages and some bonds are annuities.

It is sequence of equal instalments. An ordinary annuity is worth more than an annuity due given equal annual cash flows for ten years at 7 percent interest compounded annually. An annuity may have periods of time of any length but should always be.

Annuity is called an equal payment or uniform payment series. An annuity may have periods of time of any length but should always be of equal length. The cash flows for an annuity must all be equal and they must occur at regular intervals such as once a year or once a month.

If a series of unequal cash flows occurs at regular intervals such as once a year then the series is by definition an annuity. Which of the following statements is true about annuities. An annuity due has payments that occur at the beginning of each time period.

The future value of an annuity decreases as the interest rate increases. An annuity which starts paying monthly benefits within a month after issuance is called a n a. Bthe annual payout to an income beneficiary may not exceed 50 of the value of the trust.

A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received. They are never subject to income tax B. A time line is not meaningful unless all cash flows occur annually.

O You can still solve for I even if CF0 is positive and all the other CFs are negative. Pick up the correct statement from the following. An annuity is a series of equal payments occurring at equal period of time.

The present value of an annuity is equal to the cash flow amount divided by the discount rate. Which of the following is correctA the cash flows of an ordinary annuity all occur at the beginning of the periodsb if a series of unequal cash flows occurs at regular intervals such as once a year the the series is by definition an annuityc the cash flows for an annuity due must all occur at the ends of the periodd the cash flows for an annuity must all be equal and they. They can provide a lifetime income.

A PV of an annuity C ImageImage B The difference between an annuity and a perpetuity is that a perpetuity ends after some fixed number of payments. Time lines are not useful for visualizing complex problems prior to doing actual calculations. An annuity may have periods of time of any length but should always be of equal length.

Time lines are not useful for visualizing complex problems prior to doing actual calculations. Most loans are a form of a perpetuity. To solve for I one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the PV of the negative CFs.

In a typical loan amortization schedule the dollar amount of principal repayment paid each period decrease with each payment. Regarding a straight-life variable annuity which of the following statements is TRUE. The present value of an annuity is equal to the cash flow amount divided by the discount rate.

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