Final answer:
Ahmed's investment in Subaccount A is now valued at $7,500 after the unit value increased from $10 to $15 over the course of a year.
Step-by-step explanation:
The correct option : c
The value of Ahmed's investment in Subaccount A can be calculated by multiplying the number of units he owns by the new unit value. Originally, Ahmed purchased units at $10 each with his $5,000, meaning he bought 500 units ($5,000 / $10 per unit). After the unit value increased to $15, the value of the investment in Subaccount A is now 500 units × $15 per unit, which equals $7,500.
To find the value of Ahmed's investment in Subaccount A now, we need to calculate the number of units he purchased and then multiply it by the current unit value.
First, we need to find the number of units Ahmed purchased. He directed $5,000 of his premium into Subaccount A when the unit value was $10. So, he purchased 500 units ($5,000/$10 = 500).
Next, we need to calculate the current value of his investment. The unit value increased to $15 after a year. So, the value of his investment in Subaccount A now is $7,500 (500 units x $15).