The risk manager must find a way to create a similar cash flow to replace the lost income once the person dies.Because the timing of the death cannot be predicted, it is common to calculate the _____ of the income stream to derive a single number.

Question

Quizplus · Accepted Answer

The correct term is "present value." This is because calculating the present value of an income stream involves discounting future cash flows back to their value in today's dollars, which is essential for determining how much would need to be invested now to replace the lost income over time, regardless of when the person dies.

The Risk Manager Must Find a Way to Create a Similar