We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
A further examination of equity indexed annuities.
- Authors
Terry, Andy; Elder, Erick
- Abstract
Equity indexed annuities (EIAs) are deferred annuities that credit interest according to a formula tied to the performance of an underlying equity index. This research expands previous research, particularly that of Reichenstein (2009, 2011), by examining the distribution of returns that could have been created on a rolling monthly basis since 1928 for 11 through 15-year investment horizons. Second, we examine investment alternatives that include the options imbedded in EIAs. Third, rather than assuming constant cap rates we allow cap rates to vary with interest rates. We find that for long time horizons the opportunity costs of investing in EIAs is high.
- Subjects
EQUITY indexed annuities; INVESTMENT advisor liability; ECONOMIC aspects of decision making; FINANCIAL management; FINANCIAL planning
- Publication
Financial Services Review, 2015, Vol 24, Issue 4, p411
- ISSN
1057-0810
- Publication type
Article