Which one of the following is a correct deﬁnition?

Question

Quizplus · Accepted Answer

An ordinary annuity is a stream of equal payments which occur at the end of each time period. This is the correct definition.

Option A is incorrect as perpetuities have an infinite stream of equal payments, not unequal.

Option C is incorrect as an annuity due has equal payments that occur at the beginning of each time period, not unequal.

Option D is incorrect as a perpetuity has an infinite stream of equal payments, not a limited period.

Option E is incorrect as a perpetuity has an infinite stream of equal payments, not a series of payments over a limited period.

Which One of the Following Is a Correct Deﬁnition