Which One of These Statements Concerning Two Annuities Is Correct

question 10

Multiple Choice

Which one of these statements concerning two annuities is correct? Assume both annuities have $1,000 annual cash flows for four years.

• A)The ordinary annuity will pay on the first day of each time period.
• B)The annuity due is more valuable than the ordinary annuity.
• C)The annuity due will pay one more payment than the ordinary annuity.
• D)The ordinary annuity will have the highest value at the end of Year 4.
• E)Both annuities are of equal value given any discount rate.

---

Definitions:

Act Utilitarianism

A philosophical theory that posits the morality of an action is determined by its contribution to overall happiness, with each situation judged individually.

Deontology

An ethical theory based on the belief that actions are morally required, permitted, or forbidden based on a set of rules.

Virtue Ethics

A philosophical approach that emphasizes the role of character and virtue in moral philosophy rather than either the consequences of actions or the rules governing them.

Business Ethics

moral principles and standards that guide behavior in the world of commerce, influencing company policies and practices.