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A An ordinary annuity which pays out equal cash payments of $100 each year for 5 years. B A deferred annuity which pays out equal cash payments of $100 each year for 5 years starting 2 years from now. C Both have equivalent net present values

A An ordinary annuity which pays out equal cash payments of $100 each year for 5 years. B A deferred annuity which pays out equal cash payments of $100 each year for 5 years starting 2 years from now. C Both have equivalent net present values

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Which is more valuable? A An ordinary annuity which pays out equal cash payments of $100 each year for 5 years. B A deferred annuity which pays out equal cash payments of $100 each year for 5 years starting 2 years from now. C Both have equivalent net present values
Transcribed Image Text:Which is more valuable? A An ordinary annuity which pays out equal cash payments of $100 each year for 5 years. B A deferred annuity which pays out equal cash payments of $100 each year for 5 years starting 2 years from now. C Both have equivalent net present values
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