The traits that affect an individual's demand for a life annuity . Introduction: Adverse selection is the tendency for any proposed deal to attract the type of party who would make the deal a losing proposition to the offering party. Moral hazard is one where a party to a contract has the motivation of changing the behavior so as to make the contract appears to be less attractive to the other party. Longevity has economic implications.

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Chapter 21, Problem 18PS

Summary Introduction

To determine:

The traits that affect an individual's demand for a life annuity.

Introduction:

Adverse selection is the tendency for any proposed deal to attract the type of party who would make the deal a losing proposition to the offering party.

Moral hazard is one where a party to a contract has the motivation of changing the behavior so as to make the contract appears to be less attractive to the other party.

Longevity has economic implications.

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