An Example of How Financial Intermediaries Can Assist in Shifting

question 58

Multiple Choice

An example of how financial intermediaries can assist in shifting an individual's consumption forward in time is:

• A)Providing a line of credit.
• B)Opening a passbook account.
• C)Starting a life insurance policy.
• D)Investing in an index fund.

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Definitions:

Post-Employment Benefits

Benefits, other than pensions, that a company provides to its retired employees, such as life insurance and medical plans.

Compensated Absences

Employee benefits that provide pay for holidays, sick leave, and other forms of absence from service that are compensated by the employer.

AASB 119

The Australian Accounting Standards Board standard which outlines the accounting requirements for employee benefits, including wages, salaries, and pension plans.

Defined Benefit Post-Employment Fund

A pension plan where the benefits that an employee will receive upon retirement are defined in advance.