请解释一下statement 3

问题如下：

Which of Boylan’s statements about life annuities is least accurate?

选项：

A.Statement 1 B.Statement 2 C.Statement 3

解释：

Solution

A is correct. Statement 1 is incorrect. Because Janice and Jason are the same age, Jason will receive a higher income yield than his sister because women have a longer average life expectancy than men and, therefore, a longer expected payout period.

B is incorrect. Statement 2 is correct. If the same investment were to be made later in life, the expected payout stream would be shorter and therefore result in a higher income yield.

C is incorrect. Statement 3 is correct. The addition of a 10-year period-certain option to an annuity ensures that the carrier will make payments for at least 10 years. The probability of a 50-year-old person dying within 10 years is much lower than for an older individual, e.g., it is much more likely for an 80-year-old person to die within 10 years than a 50-year-old person to do so. It is more likely that the period-certain option would be invoked for the older person, meaning a much bigger decline in income yield compared to not having the period-certain option.