An Example of How Financial Intermediaries Can Assist in Shifting

question 15

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) starting an auto insurance policy.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's earnings.

Financing Activities

These are transactions involving raising capital and repaying investors, including payments of dividends, issuing shares, and borrowing or repaying debt.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and assets.

Additional Paid-in Capital

The amount of equity in a company that shareholders have contributed in addition to the nominal or par value of the shares.