SOFE Accredited Financial Examiner AFE Question # 48 Topic 5 Discussion

SOFE Accredited Financial Examiner AFE Question # 48 Topic 5 Discussion

AFE Exam Topic 5 Question 48 Discussion:
Question #: 48
Topic #: 5

In case of supplementary contracts, the amount of each payment is computed on the basis of the assumed (or guaranteed) interest rate and the number and frequency of payments selected. For example:


A.

The higher the assumed interest rate, the larger the amount of each payment


B.

The lower the assumed interest rate, the larger the amount of each payment


C.

The higher the assumed interest rate, the smaller the amount of each payment


D.

The higher the actual interest rate, the larger the amount of each payment


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