Consider two people age 40. a. What is the expected number of years that both are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider two people age 40. a. What is the expected number of years that both are alive? b. What is the expected number of years that at least one is alive? c. What is the actuarial present value of a pension that pays $50,000 per year as long as at least one of the two 40-year-old people survive? Use a 5% discount rate. [Remember actuarial present value means that you must discount in the usual way to get present value, but you also must weight (i.e., multiply) every yearly payment by the probability that at least one of the two 40-year-old people is alive in order to receive the $50,000 payment.] Consider two people age 40. a. What is the expected number of years that both are alive? b. What is the expected number of years that at least one is alive? c. What is the actuarial present value of a pension that pays $50,000 per year as long as at least one of the two 40-year-old people survive? Use a 5% discount rate. [Remember actuarial present value means that you must discount in the usual way to get present value, but you also must weight (i.e., multiply) every yearly payment by the probability that at least one of the two 40-year-old people is alive in order to receive the $50,000 payment.]
Expert Answer:
Answer rating: 100% (QA)
SOLUTION a The expected number of years that both are alive can be calculated using the life table f... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
The lawyers at a law firm are either associates or partners. At the end of each year, 30% of the associates leave the firm, 20% are promoted to partner, and 50% remain associates. Also, 10% of the...
-
In Exercise 11, if the pinon nut crop is fair one year, what is the expected number of years until a good crop occurs? Suppose we want to know the average (or expected) number of steps it will take...
-
On the cost of goods manufactured schedule, depreciation onfactory equipment... A. is not listed because it is not a product cost. B. is not an inventoriable cost. C. is not listed because it is...
-
Multiple-Choice Questions 1. An industry is defined as: a. A group of firms producing the exact same products and services. b. Firms producing items that sell through the same distribution channels....
-
In the following symbolized arguments, derive the line needed to obtain the conclusion (last line), and supply the justification for both lines. 1. CDA 2. ADC 3. 4. C = A ||
-
Why does collusion pose unique prevention and detection challenges?
-
Financial information for Ernie Bishop Company is presented below. Additional information: 1. Inventory at the beginning of 2012 was $118,000. 2. Total assets at the beginning of 2012 were $632,000....
-
Kevin made two investments over the past two years. His first investment wasabaseball card thatcost$50.00,whichhe sold three months later for$55.00.The second wasashare of stockinastart-upcompany....
-
1. Are the four intrinsic characteristics the best ones to base the relationship performance measures for Donnell Truong Ventures? If not, what characteristics would be more suitable? In either case,...
-
Given the vectors: A = 3i - 2j - k B = -5i + j + 2k Find: a) The magnitude of A b) The magnitude of B c) The unit vector of A d) The unit vector of B e) The dot product A.B f) The cross product AXB
-
A new approach to evaluate human life based on court decisions on damages for pain and suffering. Similar to previous approaches of evaluating human life, the Value of Statistical Life (VSL) or...
-
The price of URALITAN stock is 1 1 in the secondary market. The dividend for next year will be 0 . 5 euros, and it will growth at 1 0 % annual up to infinite. Determine the discount rate of the...
-
Write a program in C to a number is divisible by 7 or not.
-
Air France flight 358 aviation accident/incident Human Factors contribute to the overall event. Some Human Factors to Consider: Safety Culture /Organizations and Leadership Aviation Security...
-
How much of the withdrawal will Murray receive when he makes his minimum annual withdrawal from a RRIF? 100% 100% minus income tax calculated on the basis of his marginal tax rate 100% minus the...
-
9 8 7+ 6- 5 ty 3 2 For the above function f(x) = 4 . 0.87, estimate f'(x) using h = 0.001 for the following three values. f'(-4)= f'(-1) = f'(3.75) =
-
Define deferred revenue. Why is it a liability?
-
Please answer the following questions regarding the taxability of Social Security: a. A 68-year-old taxpayer has $20,000 in Social Security income and $100,000 in tax-free municipal bond income. Does...
-
Ann hires a nanny to watch her two children while she works at a local hospital. She pays the 19-year-old nanny $125 per week for 48 weeks during the current year. a. What is the employer's portion...
-
Robert Ramos (age 36) is a single taxpayer, living at 8765 Bay Dr., Monterey, CA 93940. His Social Security number is 976-23-5132. Robert's earnings and income tax withholding as the manager of a...
-
Gross profit is (A) Excess of sales over cost of goods sold (B) Sales less purchases (C) Cost of goods sold + opening inventory (D) Net profit less expenses of the period
-
To find the value of closing inventory at the end of a period we (A) Do this by physically counting the inventory (i.e. stocktaking) (B) Look in the inventory account (C) Deduct opening inventory...
-
Net profit is calculated in the (A) Trading account (B) Profit and loss account (C) Trial balance (D) Statement of financial position
Study smarter with the SolutionInn App