An annuity due differs from an ordinary annuity in that payments occur:

A At the end of each period

B At the beginning of each period

C Only once

D Randomly

✓ Correct Answer: Option B

Annuity due: payments at period start. Ordinary annuity: payments at period end. Annuity due PV is higher due to earlier payments.

💡 Why is B) the correct answer?

The correct answer to the question "An annuity due differs from an ordinary annuity in that payments occur:" is Option B: At the beginning of each period.

The other options — A) At the end of each period, C) Only once, D) Randomly — are incorrect for this CFA Exam Prep question. As explained above: Annuity due: payments at period start. Ordinary annuity: payments at period end. Annuity due PV is higher due to earlier payments.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Quantitative Methods topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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An annuity due differs from an ordinary annuity in that payments occur:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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