Assume You Are Analyzing Two Separate Annuity Pools

question 4

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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Controls that restrict unauthorized individuals from gaining access to a company’s computer facilities.

Risk Transference

The strategy of transferring the potential impact of specific risks from one party to another, often by using insurance or other contractual agreements.

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The act of buying protection against financial losses from an insurance company.

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