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Please be sure to see list of answers I have provided Question 1 drop down answers 15% 10% 20% 100% Question 2 drop down answers

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Question 1 drop down answers 15% 10% 20% 100%
Question 2 drop down answers 1500 1100 1000 1200
Question 3 drop down answers 1 10 100 0
Question 4 drop down answers 110 100 80 90
Question 5 drop down answers -10 10 1,100 0

Lindsey Life Insurance Company has an equity indexed annuity called LLIC 12 -0. For an investment of $1,000 - the investor is guaranteed the following: 1. If S&P500 returns are positive for a given year, the investor's account will be credited the return with a cap of 12% at the end of the year 2. If S&P 500 returns are negative for a given year, the investor's account will still be credited 0% at the end of the year Danielle decides to invest $1,000 with LLIC on 01/01/2020 when the S&P500 is also trading at $1,000. In order to manage the risk of the annuity, LLIC decides to: 1. Invest Danielle's $1,000 in safe risk free US Government Securities maturing in one year with a interest rate of 1% 2. Buy a Call option from your professor (who has a very bad Credit Score of 500) with a strike price of $1,000. Assume the premium for the call option is $10 Scenario 1: In one year S&P500 finishes at a value of $1,100

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