Which of the Following Most Accurately Describes the Term Annuity

question 74

Multiple Choice

Which of the following most accurately describes the term annuity?

• A)an investment which produces increasing cash flows overtime
• B)an installment loan with amortizing principal payments
• C)a stream of equal installments of cash flows made at equal time intervals
• D)a term life insurance policy

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Definitions:

Resources

Land, labor, capital, and entrepreneurial ability used to produce goods and services.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors, leading to specialized production and trade.

Absolute Advantage

A situation in which a country, individual, or company can produce a good at a lower cost per unit than competitors.

Opportunity Cost

The price paid for not choosing the second-best option during decision-making.