Question: Direction: Analyze the situation and answer the question given at the end. Lately we were approached by a couple who were unclear whether to buy

Direction: Analyze the situation and answer the question given at the end.

Lately we were approached by a couple who were unclear whether to buy an annuity now or later.

Ahmed is 70, works as a teacher at a technical academy and wants to retire now. His wife Noora, is 67 works for a tourism agent and sees no motive to give up working as she enjoys her lifestyle. She has her own small RRSP (Registered Retirement Savings Plan) funds but it his RRSP amount of BD250k approximately, about which they wanted to choose how to invest.

Their problem was similar to one often experienced by singles or couples in their age bracket. As a start they researched their options, discarding those that made them uneasy. They felt uncomfortable, she more so, in moving their money into an immediate fund. And they felt that deferred funds, while guaranteed, offered no better answers. And neither immediate funds nor deferred funds, could promise a guaranteed return.

Questions:

1. Define the Immediate and the deferred annuity using your own words, provide an example on each? ( 5 Marks)

2. How would you explain what Ahmed and Noora are experiencing? ( 5 Marks)

3. What type of annuity fund you prefer and why? ***THE SUBJECT IS MATHEMATICS OF INVESTMENT***

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Direction: Analyze the situation and answer the question given at the end (2x5=10 Marks). An insurance company was approached by a couple who were unclear when to buy an annuity. Ahmed is 70 years...

How can we assess whether a project is a success or a failure? This case presents two phases of a large business transformation project involving the implementation of an ERP system with the aim of...

What Is the PAEI Model? P roducer, A dministrator, E ntrepreneur, I ntegrator. The person in the producer role is ultimately responsible for the product or service that you're offering. They are in...

Learning Objectives 3-1 By the end of this section, you will be able to: Explain demand, quantity demanded, and the law of demand Identify a demand curve and a supply curve Explain supply, quantity...

Chapter 5 Theories of Motivation LEARNING OBJECTIVES After reading this chapter, you should be able to do the following: 1. Understand the role of motivation in determining employee performance. 2....

Lisa Benton (A) Case Study (OB, HR Management and Legal) In this project, we will be looking at a workplace scenario and individual behaviour while analysing them using the concepts learnt. Questions...

look into the transcription of the videos that we coded for the Dominance project and identify if there are any errors (grammar and spelling and etc): 1673015005057.mp4 Baseline 181 Baseline181 Hi,...

The HaveAWonderfulHoliday Company just purchased some equipment that cost $225,000.The asset is in the MACRS 3-year class for depreciation. So the depreciation rates will be .33, .45, .15, and .07...

Deluxe Ltd. ("Deluxe) ,a well-renowned automotive manufacturer and retailer with a 31 August financial year-end, is listed in the automotive sector of the JSE. Deluxe continuously expands both...

Items attached to real estate that are used for business activities are known as _ _ _ _ _ _ _ _ blank and are treated as goods under the UCC.

Discussion: Wireless Technologies 1414 unread replies.1414 replies. Draw a tic tac toe board (aka hashtag or pound sign #) on a piece of paper. Imagine that this is the diagram for a large conference...