Calculate the Value of the Nonforfeiture Options for the Following

question 83

Short Answer

Calculate the value of the nonforfeiture options for the following life insurance policy issued to a female at age 20. $$\begin{array} { l l l l l l l } \text { Face Value } & \text { Years in } & \text { Type of } & \text { Cash } & \text { Paid-up } & \text { Extended } & \text { Term } \\\underline{\text { of Policy }} & \underline{\text { Force }} &\underline{ \text { Policy} } &\underline{ \text { Value }} & \underline{\text { Ins. } }& \underline{\text { Years }} & \underline{\text { Day }} \\\$ \$ 60,000 & 7 & \text { Whole } & & & &\\&&\text { Life }&&&&\end{array}$$

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Definitions:

Consolidated Balance Sheet

A financial statement showing the aggregated financial position of a parent company and its subsidiaries.

Acquired Company

A company that has been purchased by another entity.

Trading Securities

Marketable securities that a company holds for the purpose of trading in the short term, with the intent of generating profit from price movements.

Fair Value

The estimated market value of an asset or liability, reflecting the price that two willing parties would agree to in an arm's length transaction.