객관식
Which of the following best explains how investing in securities can increase your value to a company?
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7. Receivables and Investments
Introduction to Investments in Securities
객관식
An individual aged 50 recently bought an annuity. Which of the following best describes an annuity in the context of investments in securities?
A
A contract that provides a series of periodic payments to the investor, typically after retirement, in exchange for an initial lump sum or series of payments.
B
A government bond that pays interest only at maturity and is considered risk-free.
C
A short-term debt instrument issued by corporations to raise capital, usually maturing in less than one year.
D
A type of equity security that represents ownership in a corporation and entitles the holder to voting rights.
검증된 단계별 안내1
Step 1: Begin by understanding the concept of an annuity in the context of investments. An annuity is a financial product typically used for retirement planning, where an individual pays an initial lump sum or series of payments to an insurance company or financial institution.
Step 2: Recognize the key feature of an annuity: it provides a series of periodic payments to the investor, often starting after retirement. These payments can be fixed or variable, depending on the type of annuity purchased.
Step 3: Compare the description of an annuity with the other options provided in the question. For example, a government bond pays interest at maturity and is considered risk-free, but it does not involve periodic payments to the investor. Similarly, a short-term debt instrument like commercial paper is used for corporate capital raising and does not provide periodic payments.
Step 4: Eliminate the options that do not match the characteristics of an annuity. Equity securities represent ownership in a corporation and provide voting rights, which is unrelated to the concept of periodic payments after retirement.
Step 5: Conclude that the correct description of an annuity is: 'A contract that provides a series of periodic payments to the investor, typically after retirement, in exchange for an initial lump sum or series of payments.'
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