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An ordinary annuity is characterised by: a. a series of cash flows that are identical in...

An ordinary annuity is characterised by:

a.

a series of cash flows that are identical in amount and occur at the end of consecutive time periods over a finite period of time.
b.

a series of cash flows that are identical in amount and occur at the start of consecutive time periods over a finite period of time.
c.

None of the answers are correct.
d.

a series of cash flows that are identical in amount and occur at the end of consecutive time periods over an infinite period of time.
e.

a series of cash flows that grow at a constant rate and occur at the end of consecutive time periods over an infinite period of time.

Solutions

Expert Solution

Option A is correct

a series of cash flows that are identical in amount and occur at the end of consecutive time periods over a finite period of time.

In an ordinary annuity, payment is made at the end of period and for a finite time, infinite payments are made in perpetuity

jeff jeffy answered 2 years ago
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