To Level a Net Single Premium (NSP),the NSP Is Divided

question 7

Multiple Choice

To level a net single premium (NSP) ,the NSP is divided by

• A)the maximum number of years the premium could be paid.
• B)the ordinary life annuity factor for the premium payment period.
• C)the present value of a life annuity due of $1 for the premium payment period.
• D)the deferred life annuity factor for the premium payment period.

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Definitions:

Residual Value

The estimated amount that an asset is worth at the end of its useful life.

Net Income

What a company ultimately makes, after subtracting everything it spends including taxes and costs, from the revenue it generates.

Average Rate

The mean rate or level for a particular variable over a specified period, often used in reference to interest or exchange rates.

Present Value Methods

Techniques used to determine the current worth of a future stream of cash flows, discounted at a particular rate.