Asked by shakif seymour on Jun 05, 2024
Verified
Endowment fund providing equal annual payments from accrued earnings fit the definition of a perpetuity.
Perpetuity
A financial term referring to a security or form of investment that pays an infinite series of cash flows with no end date.
Endowment Fund
A financial asset, in the form of donations, made to non-profit organizations that uses the generated income for a specific purpose.
- Recognize financial instruments or arrangements that fit the definition of a perpetuity.
Verified Answer
ZK
Zybrea KnightJun 06, 2024
Final Answer :
True
Explanation :
A perpetuity is a type of annuity that provides infinite periodic payments, and an endowment fund structured to provide equal annual payments indefinitely from its accrued earnings fits this definition.
Learning Objectives
- Recognize financial instruments or arrangements that fit the definition of a perpetuity.