In Comparing an Ordinary Annuity and an Annuity Due, Which

question 120

Multiple Choice

In comparing an ordinary annuity and an annuity due, which of the following is true?

• A) The future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity.
• B) The future value of an ordinary annuity is always greater than the future value of an otherwise identical annuity due.
• C) The future value of an annuity due is always less than the future value of an otherwise identical ordinary annuity, since one less payment is received with an annuity due.
• D) All things being equal, one would prefer to receive an ordinary annuity compared to an annuity due.

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Definitions:

Releasing Stimulus

A specific trigger that elicits a fixed action pattern or an innate behavior in animals.

Fixed Action Patterns

Innate, pre-programmed responses triggered by specific stimuli, observed in animals, which are carried out to completion once initiated and are common in mating and defensive behaviors.

Stereotyped Behavior

Stereotyped behavior involves repetitive, rigid, and often meaningless patterns of action that are characteristic of certain developmental or psychological conditions.

A Misdemeanor

A criminal offense that is less serious than a felony and generally punishable by fines, penalties, or a short term of imprisonment.