Which of the following is generally considered an example of a perpetuity?
A)Interest payments on a 10-year bond
B)Interest payments on a 30-year bond
C)Interest payments on a consol
D)Interest payments on government bonds

Question

Quizplus · Accepted Answer

A consol is a perpetual bond that pays a fixed interest payment forever. Therefore, it is considered an example of a perpetuity. A 10-year or 30-year bond has a defined term, so they are not perpetuities. Government bonds can have varying terms, so they may or may not be perpetuities depending on the specific bond.

Which of the Following Is Generally Considered an Example of a Perpetuity