When the present value of an annuity is calculated as of two or more periods before the payment of the first cash flow, the annuity is
A) an ordinary annuity.
B) a deferred ordinary annuity.
C) a compound annuity due.
D) a compound ordinary annuity.

Question

Quizplus · Accepted Answer

A deferred ordinary annuity is characterized by a delay in the start of payments. When the present value of an annuity is calculated as of two or more periods before the first cash flow, it means there's a gap between the valuation date and the start of payments, fitting the definition of a deferred ordinary annuity.

When the Present Value of an Annuity Is Calculated as of Two