Which of the Following Is False

question 126

Multiple Choice

Which of the following is false?

• A) The future value of a deferred annuity is the same as the future value of an annuity not deferred.
• B) A deferred annuity is an annuity in which the rents begin after a specified number of periods.
• C) To compute the present value of a deferred annuity, we compute the present value of an ordinary annuity of 1 for the entire period and subtract the present value of the rents which were not received during the deferral period.
• D) If the first rent is received at the end of the sixth period, it means the ordinary annuity is deferred for six periods.

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Definitions:

Housing Market

The market segment related to buying, selling, and renting residential properties.

Convergence

The phenomenon where the futures price of a commodity tends to approach the spot price as the contract expiration date nears.

Margin

The practice of buying an asset by using funds borrowed from a broker, often used in stock trading to leverage investments.

Futures Contract

A standardized legal agreement to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time in the future.