A solution to the high transaction costs is to bundle the funds of many investors so that they can take advantage of ________.
A) economies of scale
B) high interest rates
C) high rates of return
D) lower risk

Question

Quizplus · Accepted Answer

Bundling the funds of many investors allows for economies of scale, which can reduce transaction costs and improve returns. By pooling their resources, investors can spread out the costs of investment and benefit from the advantages of larger investment amounts. This can reduce transaction costs relative to investing individually and can also provide access to investment opportunities that would be unavailable to small-scale investors.

A Solution to the High Transaction Costs Is to Bundle