Terri Purchased an Annuity for $100,000

question 64

True/False

Terri purchased an annuity for $100,000.She was to receive $10,000 per year and her life expectancy was 20 years. She died after receiving eight payments.Terri's final return should reflect a loss of $20,000 ($100,000 - $80,000).

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on.

Natural Monopolies

A situation in which a single firm can supply a product or service to an entire market at a lower cost than could two or more firms, leading to a market structure where only one business exists.

Service The Market

involves addressing the needs and desires of a particular market segment by offering products, services, or solutions that cater specifically to that segment's demands.

Negative Externalities

Uncompensated adverse effects that an individual or firm's activity imposes on others, not accounted for in the market price.