Assume That at Retirement You Have Accumulated $825,000 in a Variable

question 69

Multiple Choice

Assume that at retirement you have accumulated $825,000 in a variable annuity contract. The assumed investment return is 5.5%, and your life expectancy is 18 years. What is the hypothetical constant-benefit payment?

• A) $73,358.93
• B) $33,333.33
• C) $51,481.38
• D) $52,452.73
• E) The answer cannot be determined from the information provided.

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Definitions:

Risk-Free Return

The theoretical return on an investment with no risk of financial loss.

Wildcat Fund

A type of investment fund that takes on high-risk investments, hoping for significantly higher-than-average returns.

M2 Measure

A broad measurement of a country's money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits and money market securities.

T-Bills

Short-term government securities with maturity periods of one year or less, considered a safe and liquid investment.