A series of equal cash flows to take place at the end of successive periods of equal length is called
A)rate of return.
B)an ordinary annuity.
C)a serial note.
D)a deferred annuity.
E)a perpetuity or consul.

Question

Quizplus · Accepted Answer

An ordinary annuity refers to a series of equal cash flows that occur at the end of successive periods of equal length. This is different from a deferred annuity, which has a delay before payments begin, and a perpetuity, which has an infinite stream of equal cash flows. A serial note is a type of bond where different portions or "tranches" of the bond have different maturity dates. Therefore, the best choice is B - an ordinary annuity.

A Series of Equal Cash Flows to Take Place at the End