A Cash Flow That Only Occurs in Equal Amounts Each

question 21

Multiple Choice

A cash flow that only occurs in equal amounts each year is referred to as:

• A) a lump sum.
• B) a perpetuity.
• C) an annuity.
• D) None of these.

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Definitions:

Soybean Future

A contractual agreement for the future delivery of soybeans at a predetermined price, used for hedging and speculating in the commodities market.

Wheat Spot Price

The current price at which wheat can be bought or sold for immediate delivery.

Loss

A decrease in monetary value, often referring to the difference between the purchase price and the lower selling price of an asset.

S&P 500 Index

A market index observing the activity of the top 500 large-scale corporations traded on US stock exchanges.