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Management · Q489

International Finance and Treasury

Graduate and Post Graduate · Management · question 489

Q489

Value which converts series of equal payments in to value received at beginning of investment is classified as

A.
decreased value of annuity
B.
increased value of annuity
C.
present value of annuity
Answer
D.
future value of annuity

Answer: Option C

Solution

Answer: Option C
Solution:
Value which converts series of equal payments in to value received at beginning of investment is classified as present value of annuity. An annuity is a financial product that pays out a fixed stream of payments to an individual. Annuities exist first in an accumulation phase, whereby investors fund the product with either a lump-sum or periodic payments.