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- True or False? Please explain An annuity provides a stream of cash flows for a defined period of time, while an annuity-due provides a stream of cash flows that lasts forever.A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is known as: Select one: a. Ordinary annuity b. Constant annuity c. Annuity due d. Financial annuityThe future value of an annuity due is determined one period after the first cash flow in the series. a.True b.False
- Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods .... A. Annuity B. Mezzanine Debt C. Perpetuity D. Original InvestmentThere are three categories of cash flows: single cash flows, also referred to as “lump sums,” a stream of unequal cash flows, and annuities. Based on your understanding of annuities, answer the following questions. 1. Which of the following statements about annuities are true? Check all that apply. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. An annuity is a series of equal payments made at fixed intervals for a specified number of periods. An annuity due earns more interest than an ordinary annuity of equal time. Ordinary annuities make fixed payments at the beginning of each period for a certain time period. 2. Which of the following is an example of an annuity? A job contract that pays a regular monthly salary for three years A job contract that pays an hourly wage based on the work done on a particular day 3. Eleanor loves shopping for clothes, but considering the state of the economy, she has decided to…Which of the following characteristics is a necessary feature for pricing a set of cash flows as an ordinary annuity? Group of answer choices The period of time between each cash flow must not vary. More than one of the other options are correct. The cash flows must not be a fixed, regular amount. The cash flows must occur on a yearly basis.
- Which of the following is not true regarding an annuity due? Select the correct response: It is a series of equal cash flows. Payments are made at the start of each period. It is also known as deferred annuity Cash flows occurs for a specific time.An annuity in which the first cash flow occurs at the beginning of the period is called a/an: Oordinary perpetuity. growth annuity. Oordinary annuity. annuity due.Which of the following statements is CORRECT? If some cash flows occur at the beginning of the periods while others occur at the ends, then we have what the textbook defines as a variable annuity. The cash flows for an ordinary (or deferred) annuity all occur at the beginning of the periods. If a series of unequal cash flows occurs at regular intervals, such as once a year, then the series is by definition an annuity. The cash flows for an annuity due must all occur at the ends of the periods. The cash flows for an annuity must all be equal, and they must occur at regular intervals, such as once a year or once a month.
- An annuity is a method for calculating the future value of a single payment or a series of payments. What do you think?Which of the following statements is CORRECT? 1. If some cash flows occur at the beginning of the periods while others occur at the ends, then we have what the textbook defines as a variable annuity. 2. The cash flows for an annuity must all be equal, and they must occur at regular intervals, such as once a year or once a month. 3. If a series of unequal cash flows occurs at regular intervals, such as once a year, then the series is by definition an annuity. 4. The cash flows for an annuity due must all occur at the ends of the periods. 5. The cash flows for an ordinary (or deferred) annuity all occur at the beginning of the periods.1. Which statement is FALSE? A. Future value annuity is an example of annuity. B. A perpetuity is an annuity that has maturity period. C. An annuity is a series of equal payment made for a specified number of years. D. Ordinary annuity is an annuity in which the cash flows occur at the end of each period.
