Which of the following statements best describes an ordinary annuity?

A Equal cash flows at equal time intervals forever
B Equal cash flows at equal time intervals for a specific time period
C Lumpy cash flows at equal time intervals forever
D Lumpy cash flows at equal time intervals for a specific time period

Correct Answer: Equal cash flows at equal time intervals for a specific time period

An ordinary annuity is a series of equal payments made at the end of each period for a fixed period of time.
Bissoy MCQ
#Commerce #Insurance

Related Questions

In a joint life annuity, what would happen to annuity payment if the spouse is to predecease the annuitant?
A Annuity would continue
B Annuity would cease
C A & B correct
D None of the above
Which is NOT an essential element of an ordinary annuity?
A The amounts of all payments are equal.
B The payments are made at equal interval of time.
C The first payment is made at the beginning of the first period.
D Compound interest is paid on all amounts in the annuity.
Ordinary Annuity দ্বারা কী বুঝানো হয়?
A অগ্রিম বৃত্তি
B সাধারণ বৃত্তি
C চিরস্থায়ী বৃত্তি
D বিলম্বিত বৃত্তি
A company wishes to pay out all available profits as dividends. Net profit is Tk. 26,600. There are 20,000 preference shares of Tk. 1 each with dividend at a rate of 8% and 50,000 ordinary shares of Tk. 1 each. Tk. 5000 is to be transferred to General Reserve. What ordinary dividends are to be paid in percentage?
A 40
B 35
C 30
D 45
A company wishes to pay out all available profits as dividends net profit is TA. 26,600 . There are 20,000 Preference shares of TA. I each with dividend at a rate of 8% and 50,000 Ordinary shares of TA. I each . Tk.5,000 is to be transferred to General Reserve. What Ordinary dividends are to be paid , in perc
A 60 percent
B 40 percent
C 20 percent
D 10 percent
A company wishes to pay out all available profits as dividends. Net profit is TA. 26,600. There are 20,000 Preference shares of TA. I each with dividend at a rate of 8%, and 50,000 Ordinary shares of TA. I each, Tk, 5,000 is to be transferred to General Reserve. What Ordinary dividends are to paid, in percentage?
A 60%
B 40%
C 20%
D 10%
Amount of annuity payable is inversely related to which of the following?
A Principal sum of money
B Investment period
C Rate of return
D Duration of annuity payments
Which annuity requires payment to be made at the end of each perid?
A Annuity due
B Ordinary annuity
C Growing annuity
D Perpetuity
The annuity which refers to a debt payment for recovering the initial amount or capital in equal periodical payments, is known as;
A Present Worth Annuity
B Sinking fund annuity
C Compound annuity
D Capital recovery annuity
Which one of the below is not a case of annuity?
A Payment of Rs.10, 000 received today last year on the same day and likely payment of a similar sum by the insurer next year
B Electricity Bill
C Car payments made by the loanee car owner
D Periodical mortgage payments

Next steps