Assume You Are Analyzing Two Separate Annuity Pools

question 3

Multiple Choice

Assume you are analyzing two separate annuity pools. Pool A has significantly higher mortality (deaths/thousand) than Pool B. Holding other factors constant,which pool will make higher payments per month to each annuitant?

• A) A
• B)B
• C)the monthly liquidation payments will be equal
• D)we cannot say, because mortality is not an important factor in calculating annuity payments

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Definitions:

Psychological Disorders

Mental disorders characterized by patterns of thought, feeling, and behavior that are significantly distressing, deviant from cultural norms, and lead to impairment in functioning.

Substance Abuse

The adverse or perilous engagement with psychoactive substances, encompassing both alcohol and banned drugs.

Treatment Costs

The financial expenditures associated with medical treatments, including the price of medications, therapy sessions, and other healthcare services.

Cognitive-behavioral Therapies

A group of psychotherapeutic treatments that address dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic process.