Investors often pay professional analysts to gather and monitor information on the creditworthiness of borrowers because
A)federal law requires it.
B)most investors are risk neutral.
C)the cost of acquiring information about a borrower's creditworthiness can be high.
D)doing so increases the net-of-tax yield on most investments.

Question

Quizplus · Accepted Answer

The cost of acquiring information about a borrower's creditworthiness can be high, so investors often pay professional analysts to gather and monitor this information. This helps them make informed decisions about which borrowers are likely to repay their debts, thereby reducing the risk of default and increasing the potential return on investment.

Investors Often Pay Professional Analysts to Gather and Monitor Information