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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.

Question
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.
check_circleAnswer
Step 1

An annuity means a fixed sum of money is received or paid at regular intervals of time. 

Variable annuity provides the option to invest in various combination of investment vehicles like stocks, mutual funds making it flexible

The Cash flow...

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