E
Exam Bank Practice Exam Bank →
Home › Exam FM › Annuities — payment timing and valuation symbols

How to Solve Annuities — payment timing and valuation symbols Questions on Exam FM

Exam FM Topic: Annuities — payment timing and valuation symbols Verified Procedural Question
Sample Practice Problem ID: #9JZ8H
A five-payment annuity-due is valued immediately before its first payment. When is that first payment made?
(A)At the end of year five only
(B)One payment period after the valuation date
(C)One payment period before the valuation date
(D)Immediately at the valuation date
(E)Half a payment period after the valuation date
📖 Worked Solution & Strategy
Reasoning Place the valuation date and payment times on a timeline. Immediate annuities first pay one period after valuation; due annuities first pay at valuation.
Application An annuity-due pays at the beginning of each payment period, so its first payment occurs immediately at the valuation date. Answer The answer is Immediately at the valuation date, option (D).

Final Answer: Option (D)

Unlock Full Step-by-Step Solution & Practice

Get instant access to this worked derivation plus procedurally generated practice questions for Exam FM.

Go to Home Page → Start Practice Now →

© Exam Bank — Procedural Practice Bank for Actuarial Exams (P and FM).

XML Sitemap • Home • Start Practice