An annuity promises t - Study guides, Class notes & Summaries

Chapter 3 The Time Value of Money TRUE/FALSE T 1. Compounding refers to the earning of interest on interest earned previously. F 2. The larger the rate of interest, the smaller is the future value of a dollar. T 3. If a bank pays 2 percent compounded daily, the true rate of interest is greater than 2 percent. T 4. A series of equal payments is called an annuity. T 5. If interest rates are 0 percent, an annuity of $100 for ten years is the same as $1,000 today. ...

CHAPTER 3 Mortgage Loan Foundations: The Time Value of Money TRUE/FALSE 1. In order to solve a compounding problem, you must know all four of the variables in order to solve for the fifth variable. (T) 2. One way to calculate the present value of a single payment is with the following formula: PV = FV * (1+i)n. (F) 3. At 6%, the present value of a $1 payment in 12 months is .. At 7%, the present value of a $1 payment in 12 months is .. (F) 4. The future value of $800 deposited ...

FIN 3320 Exam 2 | Questions with complete solutions Suppose United Bank offers to lend you $10,000 for one year at a nominal annual rate of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. What is the effective annual rate on the loan? a 8.24% b 8.45% c 8.66% d 8.88% e 9.10% You sold a car and accepted a note with the following cash flow stream as your payment. The effective price you received for the ca...

Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made? - the account can be rolled into the surviving spouse's IRA T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the deat...

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 An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity - ANSWER An installment Refund annuity One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 mo...

7 – Annuities Questions and Answers | Latest Update | Graded A+ **What type of annuity did N purchase at age 50, ensuring $2,000 per month starting at age 70 for life?** Fixed Deferred Annuity. **After receiving monthly payments for 2 years from a $50,000 single premium Straight Life Annuity, what obligation does the insurer have upon G's death?** The insurer is not required to make any further payments. **What distinguishes a variable annuity?** It involves investments ...

What type of risk is unique to a specific industry, business enterprise, or investment type? - ANSWER-Nonsystematic risk Under which of the following circumstances is an investor in a position to acquire stock? - ANSWER-Buy a call, sell a call (The holder of a call has the right to buy stock at the strike price if exercised. The seller of a put is obligated to buy stock at the strike price if exercised) Options- a premium - ANSWER-the cost of an option contract, expressed in dollars per sh...

1 NORTH CAROLINA XCEL TESTING LIFE & HEALTH INSURANCE EXAM STUDY EXAM | QUESTIONS & ANSWERS (VERIFIED) | LATEST UPDATE | GRADED A+ Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: Correct Answer: 1970 - Fair Credit Reporting Act What type of reinsurance contract involves two companies automatically sharing their risk exposure? Correct Answer: Treaty What is the name of the law that requires insurers to d...

1 NORTH CAROLINA XCEL TESTING LIFE & HEALTH INSURANCE EXAM | QUESTIONS & ANSWERS (VERIFIED) | LATEST UPDATE | GRADED A+ Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: Correct Answer: 1970 - Fair Credit Reporting Act What type of reinsurance contract involves two companies automatically sharing their risk exposure? Correct Answer: Treaty What is the name of the law that requires insurers to disclose info...

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 An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity - ANSWER-An installment Refund annuity One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 mo...