Expert answer:TIAA-CREF, annuity contracts and personal finance,

Answer & Explanation:This is a personal finance class. it has 22 question false and true only. I only need the answer. personal_finance_hw_4__1_.odt
personal_finance_hw_4__1_.odt

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QUESTION 1
1.
According to TIAA-CREF
(https://www.tiaa-cref.org/public/advice-guidance/investing/consider-risk-and-return?
p=1331943740203) “71% of Americans mistakenly feel they can eliminate investment risk
entirely by having a diversified portfolio; 53% think that higher risk guarantees higher
returns, and 29% believe all investments offer the same level of risk.
True
False
QUESTION 2
1.
One feature that all annuity contracts have in common is that the annuitant can
never outline the annuity payments.
True
False
QUESTION 3
1.
An immediate annuity is an annuity contract in which payments start within 12
months of the date of purchase. The immediate annuity is purchased with a single premium
and periodic payments are generally equal and made monthly, quarterly, semi-annually or
annually.
True
False
QUESTION 4
1.
All annuities are a contract between a purchaser and an insurance company in which
the purchaser agrees to make a lump sum payment or series of payments in return for
disbursements based on the performance of the Standard and Poor’s 500 Stock Index,
beginning either immediately (within 12 months) or at some future date. Annuity contracts
are an effective way for people to gain exposure to the stock market because the annuity
payments can only increase over time.
True
False
QUESTION 5
1.
A variable annuity contract can be defined as a contract in which the insurance
company varies the annuity payments based on the net income of the insurance company. If
the net income of the insurance company increases, then the annuity payments associated
with a variable annuity contract will increase.
True
False
QUESTION 6
1.
Which investment returns a greater future value at time 10; A or B
INVESTMENT A
time
return
investment
0
$1,000.00
1
3%
2
3%
3
3%
4
3%
5
3%
6
3%
7
3%
8
3%
9
3%
10
3%
INVESTMENT B
time
return
investment
0
$1,000.00
1
1%
2
3%
3
4%
4
3%
5
-2%
6
4%
7
-2%
8
-1%
9
-5%
10
6%
A
B
QUESTION 7
1.
If you are concerned with the risk of outliving your financial resources, then you
might consider purchasing an immediate annuity at least in an amount sufficient to cover
your basic living expenses.
True
False
QUESTION 8
1.
Generally, investments that have the potential to generate higher returns, such as
shares of individual companies, also carry higher risks.
True
False
QUESTION 9
1.
Which investment returns a greater future value at time 10; A or B
INVESTMENT A
time
return
0
1
2
3
4
5
6
7
8
9
10
investment
$1,000.00
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
INVESTMENT B
time
return
investment
0
$1,000.00
1
-1%
2
-1%
3
2%
4
3%
5
2%
6
-3%
7
7%
8
6%
9
6%
10
4%
A
B
QUESTION 10
1.
It makes sense to always sell your risky assets when the market for these assets
becomes volatile and then buy them back when volatility declines.
True
False
QUESTION 11
1.
When you will need to spend wealth should have no bearing on how you select your
investments.
True
False
QUESTION 12
1.
Variable annuities are a riskier investment than fixed annuities.
True
False
QUESTION 13
1. Which investment returns a greater future value at time 10; A or B
INVESTMENT A
time
return
investment
0
$1,000.00
1
3%
2
3%
3
3%
4
3%
5
3%
6
3%
7
3%
8
3%
9
3%
10
3%
INVESTMENT B
time
return
investment
0
$1,000.00
1
-1%
2
2%
3
-1%
4
2%
5
-1%
6
2%
7
-1%
8
6%
9
6%
10
6%
A
B
QUESTION 14
1. An annuity contract where there are two annuitants (called joint annuitants), usually
a husband and wife and the periodic payments continue until the death of both is an
example of a Period Certain Annuity.
True
False
QUESTION 15
1. Which investment returns a greater future value at time 10; A or B
INVESTMENT A
time
return
investment
0
$1,000.00
1
3%
2
3%
3
3%
4
3%
5
3%
6
3%
7
3%
8
3%
9
3%
10
3%
INVESTMENT B
time
return
investment
0
$1,000.00
1
1%
2
2%
3
3%
4
3%
5
4%
6
3%
7
4%
8
4%
9
1%
10
3%
A
B
QUESTION 16
1. Risky investments always perform better than less risky investments over a five-year
period.
True
False
QUESTION 17
1. Annuity contracts are designed with many different features. It is sensible to plan out
the timing, certainty and magnitude of annuity payments for the contracts you are
considering across different scenarios. These scenarios should include the
annuitant’s death taking place at different times.
True
False
QUESTION 18
1. Diversification across markets and risky asset classes can eliminate all risk from your
investment portfolio.
True
False
QUESTION 19
1. The goal of most annuities is to provide a steady stream of income during retirement
for a specified period of time or for the remainder of one or more lives.
True
False
QUESTION 20
1. All annuity contracts have a feature that protects the annuitant from inflation.
True
False
QUESTION 21
1. Immediate annuity contracts will only pay the annuitant. There are no exceptions.
This means that upon the annuitant’s death the contract is terminated and the
insurance company that issued the annuity has no more obligations.
True
False
QUESTION 22
1. Without a financial plan it is difficult to choose the investments that will provide
sufficient value at the correct time.
True
False
…
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