Ethical Considerations in Annuity Sales to Seniors National American University TABLE OF CONTENTS A. Abstract B. Introduction - Thesis C. Definitions i. Annuities ii. Fiduciary responsibility D. The specialty of the senior market E. The evolution of ethical issues surrounding sales to seniors F. The Government’s Involvement in the Problem G. In general‚ when is selling these products to seniors inappropriate? H. In general‚ when is selling
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Chapter 2: (Contingent) Life Annuities 2.1 Annuity Certain Review 2.2 Net Single Premium(NSP) 2.3 Pure Endowment 2.4 Whole Life annuities 2.5 Temporary Life Annuities 2.6 Deferred Life Annuities 2.7 Varying Life Annuities 1 AS2053 Feb. 2012 Lecture Notes-AM Note-Chapter 2 Chapter 2- Life Annuities Note: There are copies of the text tables at the end of the lecture note handout. You should print them off and bring them to class (for examples) 2.1 Annuity Certain Review • most of this
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International Monetary Fund Headquarters Washington‚ D.C.‚ USA Managing Director Dominique Strauss-Kahn Central Bank of Currency ISO 4217 Code XDR Base borrowing rate 3.49% for SDRs Website www.imf.org History The International Monetary Fund was conceived in July 1946 during the United Nations Monetary and Financial Conference. The representatives of 45 governments met in the Mount Washington Hotel in the area of Bretton Woods‚ New Hampshire‚ United States‚ with the delegates
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rate is the key to properly valuing future cash flows‚ whether they be earnings or obligations. Present Value of annuity is a series of equal payments or receipts that occur at evenly spaced intervals. Leases and rental payments are examples. The payments or receipts occur at the end of each period for an ordinary annuity while they occur at the beginning of each period; For an annuity due. PVoa = PMT [(1 - (1 / (1 + i)n)) / i] Future Value is the value of an asset or cash at a specified date in
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Value - Contents • Valuing Cash Flows – The Time Value of Money – Future Value – Present Value – Value Additivity • Project Evaluation – Net Present Value – The Net Present Value Rule • Shortcuts to Special Cash Flows – Perpetuities - Growing Perpetuities – Annuities - Growing Annuities • Compound Interest Rates – Compound Interest versus Simple Interest – Discrete Compounding – Continuous Compounding – Effective Annual Yield • Adjusting for Inflation Principles of Finance Present Value - Page 3
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Discounted Cash Flow Valuation Chapter 6 D.Chotee FTX2020F 2013 Chapter objectives Be able to compute the future and present value of multiple cash flows Understand what an annuity is and how to calculate its present and future value How to calculate the present value of a perpetuity Appreciate the effects of compounding on interest rate quotations Understand how loans are amortized or paid off D.Chotee FTX2020F 2013 Readings Chapter 6: 6.1‚ 6.2‚ 6.3‚ 6.4 D.Chotee FTX2020F
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Management Science-II Prof. R.Madumathi MODULE 2 Finance – An Introduction The functions of finance in an organization is interlinked with other managerial responsibilities and in many instances‚ the finance manager could also done the role of a managing director. For the smooth functioning as well as to achieve excellence‚ organizations have to concentrate on the financial impact of a decision and its consequences. This also helps the organization to aim at a desired competency level against
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SECTION 2: TIME VALUE OF MONEY Decision problems in business usually involve a decision over whether to accept one alternative over another‚ or whether to implement a plan or not. In most cases‚ the effects of these decisions are felt in the future. Examples: Expand into a new market (geographical‚ consumer segment‚ etc.) or not? Now or later? Outsource production or keep it in-house? Grow organically or acquire a competitor? Or don’t grow at all? Purchase shares in Microsoft
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FORMULA SHEET – for student reference only Perpetuity: The value of a perpetuity of $RM1 per year is: Equivalent Annual Cost: If an asset has a life of ‘t’ years‚ the equivalent annual cost is: Annuity: The value of an annuity of $RM1 per period for t years (t-year annuity factor) is: Measures of Risk: Variance of returns = σ2 = expected value of Standard deviation of returns‚ σ = Covariance between returns of stocks
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Continuous Compounding (to find PV) = Co * 1/er*t PERPETUITY PV = C/r (C = Cash inflow) PV of Growing Perpetuity = PV = C/r-g (r = initial rate‚ g = growth rate) * Initial rate is always greater than growth rate. Perpetuity Interest Rate Perpetuity Interest Rate Annuity PVA (Present value of annuity) = C[1/r – 1/r(1+r)t ] PV Of Growing Annuity = C[(1+r)t -1/r] FVA (Future value of annuity) = PMT/r-g[1- (1+g)n/(1+r)n] NET PRESENT VALUE
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