Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) The difference between an annuity and a perpetuity is that an annuity ends after some fixed number of payments.
• B) Most car loans, mortgages, and some bonds are annuities.
• C) A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever.
• D) An annuity is a stream of N equal cash flows paid at irregular intervals.

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Definitions:

Reverse Stock Split

A corporate action that reduces the number of a company's outstanding shares by combining them into a smaller number of shares.

Stock Price

The cost of purchasing a share of a company in the stock market, which fluctuates based on supply and demand, company performance, and market conditions.

Share Repurchases

A process by which a company buys back its own shares from the market, reducing the amount of outstanding stock.

Tax Considerations

The implications of tax laws and regulations on financial decisions and transactions.