When a bank takes savings from many small savers and lends it to many borrowers, the bank:
A) Decreases the risk to savers through diversification
B) Increases the risk to borrowers through high transaction costs
C) Decreases the risk to savers through economies of scale
D) Decreases the return to savers and increases the cost to borrowers
Correct Answer:
Verified
Q16: Financial intermediation exists, in part, because:
A)Financial markets
Q17: If financial intermediaries did not have the
Q18: The reason financial intermediaries play such an
Q19: Examples of economies of scale are:
A)The additional
Q20: One reason financial intermediaries earn profits is
Q22: The usual situation in banking regarding asymmetric
Q23: Lines of credit provided by financial intermediaries:
A)Decrease
Q24: Most individuals save at banks rather than
Q25: Mutual funds are attractive because:
A)They provide high
Q26: Mutual funds offer investors:
A)A greater return for
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