One of the criteria for selecting annuity is

Select one:

a. The rate of return for government securities, such as Merdeka Bond

b. The number of years in retirement

c. The current rate of inflation

d. The 5-year projected rate of return of similar fund

One of the criteria for selecting annuity is

Select one:

a. The rate of return for government securities, such as Merdeka Bond

b. The number of years in retirement

c. The current rate of inflation

d. The 5-year projected rate of return of similar fund

Whenever an investor is choosing an annuity plan they must consider the factors such as safety, liquidity and returns. These factors are the most important factors in order to ensure that the capital invested will be safe and they will get expected returns. Now in order to ensure that the returns which will accrue on the annuity is good and sufficient in order to also satisfy the concept of time value of money, which states that the value of money keeps decreasing, we really need to keep a track on the present inflation rate and while making an informed decision, this is one of the major factors to be considered as annuity plans are generally long term in nature and such investments must not loose its value over the period of time.

Factors such as projected rate of 5 years, return on government bonds and year for retirement are not that important to take a decision as these dont directly influence the returns one can expect. Therefore the right answer is option c.