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29 September, 11:19

Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply.

(A) The principal amount of a perpetuity is repaid as a lump-sum amount

(B) In a perpetuity, returns-m the form of a series of identical cash flows-are earned.

(C) A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue Indefinitely Into the future.

(D) A perpetuity continues for a fixed time period.

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Answers (1)
  1. 29 September, 12:28
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    (C) A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue Indefinitely Into the future.

    Explanation:

    a false

    the principal is never repaid on a perpetuity

    d false the perpetuity is for an indefinite period of time.

    definition:

    the perpetuity consist in a principal which yield a return over time indefinite. this return do not include any amortization in the principal neither principal installment are done through the investment or loan life
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