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Author Question: Suppose someone offered you your choice of two equally risky annuities, each paying $5,000 per year ... (Read 361 times)

@Brianna17

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on: Apr 25, 2021
Suppose someone offered you your choice of two equally risky annuities, each paying $5,000 per year for 5 years. One is an annuity due, while the other is a regular (or deferred) annuity. If you are a rational wealth maximizing investor, which annuity would you choose?
◦ The annuity due
◦ The deferred annuity
◦ Either one, because as the problem is set up, they have the same present value.
◦ Without information about the appropriate interest rate, we cannot find the value of the two annuities, hence we cannot tell which is better.
◦ The annuity due; however, if the payments on both were doubled to $10,000, the deferred annuity would be preferred.
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Marked as best answer by @Brianna17 on Apr 25, 2021

blfontai

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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@Brianna17

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review

parshano

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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