Which Stream of Cash Flows Is Not an Example of an Annuity

question 47

Multiple Choice

Which stream of cash flows is not an example of an annuity?

• A) Fixed rate mortgage payment
• B) Mortgage payment where the interest rate is reset annually
• C) 48 month car payment
• D) Interest payment on a 10 year Treasury bond

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Definitions:

Treasury Shares

Stock that has been bought back by the issuing company, reducing the amount of outstanding stock on the open market.

Par Value

Par value is a nominal value assigned to a security or stock as stated in its corporate charter, often used to determine legal capital or face value.

Journal Entry

A record in accounting that represents a transaction and its effect on accounts.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.