Which of the Following Is True of Annuities

question 38

Multiple Choice

Which of the following is true of annuities?

• A) An ordinary annuity is an equal payment paid or received at the beginning of each period.
• B) An annuity due is a payment paid or received at the beginning of each period that increases by an equal amount each period.
• C) An annuity due is an equal stream of cash flows is paid or received at the beginning of each period.
• D) An ordinary annuity is an equal payment paid or received at the end of each period that increases by an equal amount each period.

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Definitions:

Fee Estate

An interest in land that grants the holder full ownership rights, potentially lasting indefinitely.

Life Estate

A property interest that lasts for the lifetime of a specific individual, after which the property passes to another designated party.

Conveyed

Transferred or passed on ownership, rights, or properties from one person to another.

Immediate Possession

Immediate possession refers to a legal situation where an individual or entity has the right to take control of a property or asset without delay.