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Period certain annuity |
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Period certain annuityAn annuity that provides guaranteed payments to an annuitant for a specified period of time.Period certain annuity Similar MatchesCertainty Equivalent ReturnCertainty Equivalent ReturnThe certain (zero risk) return an investor would trade for a given (larger) return with an associated risk. For example, a particular investor might trade an uncertain expected 4% active return with 6% risk, for a certain active return of 1.5%. CertaintyCertaintyPrecise knowledge of an economic variable, as opposed to belief that it could take on multiple values. Contrasts with uncertainty. One aspect of complete information. UncertaintyUncertaintyFailure to know anything that may be relevant for an economic decision, such as future variables, details of a technology, or sales. In models, uncertainty usually appears as a random variable and corresponding probability density function. But in practice, most international models, especially of trade, assume certainty. Inflation uncertaintyInflation uncertaintyThe fact that future inflation rates are not known. It is a possible contributing factor to the makeup of the term structure of interest rates. Certainty equivalentCertainty equivalentAn amount that would be accepted today (risk free) in lieu of a chance to receive a possibly higher, but uncertain, amount. Further SuggestionsAnnuity certainEndogenous uncertainty Price uncertainty annuity certain |
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