An Annuity Stream Where the Payments Occur Forever Is Called

question 381

Multiple Choice

An annuity stream where the payments occur forever is called a(n) :

• A) Annuity due.
• B) Indemnity.
• C) Perpetuity.
• D) Amortized cash flow stream.
• E) Amortization table.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership of the company.

Firm's Assets

All items of value owned by a company, such as cash, equipment, and intellectual property.

Call Option

An economic deal that permits the buyer to have the option to acquire a stock, bond, commodity, or another asset at a predetermined price during a designated period, without being obligated to do so.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specific time.