#1
What is an annuity?
A one-time payment
A series of equal periodic payments
A type of loan
A government bond
#2
Which of the following is NOT a type of annuity?
Fixed annuity
Variable annuity
Indexed annuity
Non-renewable annuity
#3
Which of the following statements about annuities is true?
An annuity involves a single payment.
An annuity involves periodic payments.
Annuities are only used for investments.
Annuities have a fixed interest rate.
#4
What is the primary advantage of a fixed annuity?
Guaranteed returns
Potential for high returns
Flexibility in payments
Variable interest rates
#5
Which of the following is NOT a consideration when choosing an annuity?
Age of the annuitant
Income needs
Risk tolerance
Credit score
#6
What is the 'annuity due' payment mode?
Payments made at the beginning of each period
Payments made at the end of each period
Payments made annually
Payments made monthly
#7
What is the formula to calculate the future value of an ordinary annuity?
FV = Pmt * [(1 + r)^n - 1] / r
FV = Pmt * [(1 + r)^n] - 1 / r
FV = Pmt * [(1 + r)^n - 1] * r
FV = Pmt * (1 + r)^n
#8
What is the difference between an ordinary annuity and an annuity due?
Timing of payments
Frequency of payments
Rate of return
Tax treatment
#9
Which of the following factors affects the present value of an annuity?
Number of compounding periods
Payment frequency
Interest rate
All of the above
#10
What is the concept of annuity immediate?
An annuity with immediate payments
An annuity with delayed payments
An annuity that starts in the future
An annuity with variable payments
#11
Which of the following is a disadvantage of annuities?
Tax-deferred growth
Liquidity constraints
Stable income stream
High-risk investment
#12
What is the concept of 'annuitization'?
Converting a sum of money into a series of payments
Investing in a variable annuity
Increasing the frequency of annuity payments
Delaying annuity payments
#13
What does the 'annuity factor' represent?
The total amount of an annuity
The present value of an annuity of $1 per period
The future value of an annuity of $1 per period
The interest rate used in annuity calculations
#14
In a decreasing annuity, what happens to the payment amount over time?
It increases
It decreases
It remains constant
It fluctuates
#15
What is a 'life annuity'?
An annuity that pays out until a specific age is reached
An annuity that pays out for the life of the annuitant
An annuity that pays out only after death
An annuity that pays out a lump sum amount
#16
What is the purpose of annuitization?
To receive a lump sum payment
To convert a lump sum into a stream of payments
To withdraw from an annuity
To cancel an annuity contract
#17
What is a contingent annuity?
An annuity that depends on certain conditions being met
An annuity that pays out based on the annuitant's health
An annuity with variable interest rates
An annuity with fixed payments