An Annuity Stream of Cash Flow Payments Is a Set

question 79

Multiple Choice

An annuity stream of cash flow payments is a set of:

• A)equal cash flows occurring at equal periods of time over a fixed length of time.
• B)equal cash flows occurring each time period forever.
• C)either equal or varying cash flows occurring at set intervals of time for a fixed period.
• D)increasing cash flows occurring at set intervals of time that go on forever.
• E)arbitrary cash flows occurring each time period for no more than 10 years.

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Definitions:

Securities

Securities that signify ownership in a corporation listed on the stock market, a debt obligation with a government entity or company (bond), or entitlements to ownership through an option.

Day of Record

The date set by a company on which the investors must be on the company's books in order to receive a dividend.

Money Market Instruments

Short-term debt instruments, usually with a maturity of less than one year, used for borrowing and lending in the money market.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations to finance their immediate operational needs, characterized by its low-risk and short maturity period.