You Just Received an Insurance Settlement Offer Related to an Accident

question 66

Multiple Choice

You just received an insurance settlement offer related to an accident you had six years ago.The offer gives you a choice of one of the following three offers: You can earn 7.5 percent on your investments.You do not care if you personally receive the funds or if they are paid to your heirs should you die within the settlement period.Which one of the following statements is correct given this information?

• A)Option A is the best choice as it provides the largest monthly payment.
• B)Option B is the best choice because it pays the largest total amount.
• C)Option C is the best choice because it is has the largest current value.
• D)Option B is the best choice because you will receive the most payments.
• E)You are indifferent to the three options as they are all equal in valuE.

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Definitions:

Numerator

The top number in a fraction that represents the part of the whole being considered or counted.

Denominator

The bottom number in a fraction that represents the total number of equal parts the whole is divided into.

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without breaking any constraints, often associated with statistical calculations.

F-distribution

A probability distribution used in statistics to model the ratio of variances among variables, often utilized in the analysis of variance (ANOVA).