Chuck and nancy take their pet rock company public and are


Chuck and Nancy take their pet rock company public and are soon multimillionaires. Recognizing the volatility facing the pet rock industry, Chuck purchased a $5M straight life annuity that pays $200K a year. Chuck dies in a freak rock stampede 5 years later. What amount will be in his GE?

What if it was a Joint and Survivor annuity and Chuck paid 60%? A comparable annuity for Nancy based on her current age would cost $4M and at original purchase age would cost $6M.

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Financial Management: Chuck and nancy take their pet rock company public and are
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