Multiple choice

Which of the following statements best describes an ordinary annuity?

  1. Equal cash flows at equal time intervals forever.

  2. Equal cash flows at equal time intervals for a specific time period.

  3. Lumpy cash flows at equal time intervals forever.

  4. Lumpy cash flows at equal time intervals for a specific time period.
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B Correct answer
Explanation

An ordinary annuity is a series of equal payments made at the end of each period for a fixed period of time.

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