As the cost of gathering information on foreign firms continues to decrease,___ should become an increasingly more cost-effective means of raising funds internationally.

Question

Quizplus · Accepted Answer

As the cost of gathering information on foreign firms decreases, securitization (the packaging and selling of debt securities backed by assets) becomes a more cost-effective means of raising funds internationally because it allows for a diversified pool of investors and can be structured to mitigate risks. Financial intermediation and bank lending may still require extensive research and due diligence, while portfolio investment may still have high transaction costs and currency risk.

As the Cost of Gathering Information on Foreign Firms Continues