The payments from an annuity offered by a life insurance company can either begin immediately or may be deferred to start at some future date.

People who forgo a high expected value to avoid a disaster with a low probability are:

A) risk takers. B) risk averters. C) risk calculators. D) risk predictors.

One problem with the approach used in question 16.8 is ________

A) it is difficult to determine the foreign cash flows in the foreign currency B) it is difficult to determine the appropriate foreign currency spot rate to the domestic currency C) it is difficult to determine the appropriate foreign currency discount rate to the domestic currency D) it is difficult to determine the domestic currency cash flows