SIE Exam Question 571: Answer and Explanation

Question: 571

In any single life private annuity transaction, if the seller outlives his or her actuarial life expectancy, the purchaser will have paid __________ for the property. If the seller does not outlive his or her actuarial life expectancy, the __________ will have made a good financial deal.

• A. too much, purchaser
• B. too much, seller
• C. too little, purchaser
• D. too little, seller

Correct Answer: A

Explanation:

In any single life private annuity transaction, if the seller outlives his or her actuarial life expectancy, the purchaser will have paid too much for the property. If the seller does not outlive his or her actuarial life expectancy, the purchaser will have made a good financial deal.