Compared to households, FIs often have economies of scale when purchasing or selling securities issued by businesses and governments.

Question

Quizplus · Accepted Answer

Financial institutions often have larger amounts of money to invest, which allows them to negotiate better prices and lower transaction fees when buying or selling securities. They also have more resources for research and analysis, enabling them to make more informed investment decisions. These advantages result in economies of scale for FIs in securities transactions.

Compared to Households, FIs Often Have Economies of Scale When