Which of the following statements is CORRECT?
A) The cash flows for an ordinary (or deferred) annuity all occur at the beginning of the periods.
B) If a series of unequal cash flows occurs at regular intervals, such as once a year, then the series is by definition an annuity.
C) The cash flows for an annuity due must all occur at the ends of the periods.
D) The cash flows for an annuity must all be equal, and they must occur at regular intervals, such as once a year or once a month.

Question

Quizplus · Accepted Answer

An annuity is defined by having equal cash flows that occur at regular intervals. Options A, B, and C incorrectly describe the timing and nature of cash flows for annuities and annuity dues.

Which of the Following Statements Is CORRECT