Glossary

Liquidity, in the claim-property sense, is the structural property of a claim that specifies what rights the participant retains over the underlying capital, with four possible values: full, partial, conditional, or none.

Liquidity preference is the value an individual assigns to retaining direct access to and control over capital, which shapes the choice between arrangements that preserve capital access and those that convert capital into income.

Living benefits are optional riders attached to a variable or indexed annuity that guarantee a minimum level of income, withdrawal, or accumulation while the contract owner is alive, in exchange for a separately disclosed charge. Why it matters Living benefits is the umbrella term for the riders that transfer longevity or downside risk on top of an underlying annuity whose account value remains at market. Naming the category separates the rider — the source of the guarantee and it

Log utility is the utility function in which each additional dollar of wealth contributes less than the prior dollar, following the logarithm — distinctive because maximizing expected log utility under multiplicative wealth dynamics coincides with maximizing the long-run growth rate of wealth.