annuity bond


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annuity bond

See consol.
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In the case of an annuity bond that continues to pay out coupons for as long as the individual is alive, its price depends on the whole probability distribution of death rates for this individual; in other words, T is a random variable and not a fixed parameter.
Annuity bonds with random maturities are currently not traded on financial markets, but insurance companies still provide life annuities with uncertain values of T.