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The contract value of a GIC is __________; the fair value of a GIC is __________. Select one: a. the present value of future cash flows; the future value of future cash flows b. its cost; the present value of future cash flows c. the future value of future cash flows; the present value of future cash flows d. its cost; the future value of future cash flows

The contract value of a GIC is __________; the fair value of a GIC is __________. Select one: a. the present value of future cash flows; the future value of future cash flows b. its cost; the present value of future cash flows c. the future value of future cash flows; the present value of future cash flows d. its cost; the future value of future cash flows

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The contract value of a GIC is __________; the fair value of a GIC is __________.

Select one:
a.

the present value of future cash flows; the future value of future cash flows

b.

its cost; the present value of future cash flows

c.

the future value of future cash flows; the present value of future cash flows

d.

its cost; the future value of future cash flows

Expert Solution
Step 1

GIC refers to the guaranteed investment plan which pays the interest and maturity to the beneficiary at some specific period of time.

This is the plan which is normally issued by the Life Insurance companies to non qualified institution.

 

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