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Which of the following are characteristics of a perpetuity?

1) It has a fixed term
2) It pays a fixed amount of money at regular intervals
3) It has no end date
4) It is a type of bond

User Omo
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1 Answer

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Final answer:

Perpetuities are characterized by fixed and regular payments without an end date, distinguishing them from bonds, which have a maturity date.

Step-by-step explanation:

The characteristics of a perpetuity include it paying a fixed amount of money at regular intervals and having no end date. Unlike a bond, which has a maturity date when the borrower will pay back its face value as well as its last interest payment, a perpetuity does not have a fixed term; the payments continue indefinitely. Bonds typically have a coupon rate or interest rate, usually paid semi-annually, and they have a face value which is the amount the borrower agrees to pay the investor at maturity.

User Nico Martin
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