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Question
Which one of the following statements concerning annuities offered by insurers is not true?
A. Interest on annuities is not taxed until the investor receives the payments.
B. Annuity payments may be fixed or variable.
C. Annuity contributions are not capped by the IRS.
D. Annuities can be deferred or immediate.
E. Annuity payments must cease upon the policyholder's death.
Answer
This answer is hidden. It contains 1 characters.
Related questions
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What is the total amount of net fee revenue generated from the mortgages over the year?
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E. interest rate and currency.
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A _____ position in T-bond futures should be used to hedge falling interest rates and a _____ position in T-bond futures should be used to hedge falling bond prices.
A. long; short
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A bond portfolio manager has a $25 million market value bond portfolio with a 6-year duration. The manager believes interest rates may increase 50 basis points. Which of the following could be used to help limit his risk?
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II. Buy bond futures contracts.
III. Buy call options on the bonds.
IV. Buy put options on the bonds.
A. I only
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E. II and III only
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A macro hedge is a hedge of a particular asset or liability exposure to a change in a macroeconomic variable.
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The bank's one-year repricing gap is (Million $)A. $425.B. $285.C. $74.D. $140.E. $66.
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Due to convexity problems, banks are actually better off using the simpler repricing model to manage interest rate risk rather than the duration model.
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If a bank has a negative repricing gap, falling interest rates increase profitability.
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Why might a bank face abnormal deposit drains?
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b) Borrowed funds to total assets
c) Loan commitments to total assets
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Explain how liquidity risk can lead to insolvency risk.
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In the absence of deposit insurance, a deposit is a _______________ to the bank's assets.A. pro rata claimB. first come/first serve claimC. full pay or no pay claimD. both A and BE. both B and C
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Q:
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A four-class CMO has Class A, Class B, Class C, and the residual Class Z securities outstanding. Which class has the longest duration?
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B. Class B
C. Class C
D. Class Z
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Q:
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B. the bonds had variable interest rates.
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