Financial intermediaries exist because small investors cannot efficiently ________.

Question

Quizplus · Accepted Answer

Financial intermediaries exist to perform various functions such as pooling funds, diversifying portfolios, gathering information on potential borrowers, assessing and monitoring credit risk, and providing liquidity. Small investors often lack the resources and expertise to perform these functions efficiently, hence the need for financial intermediaries. Therefore, all the options presented (A, B, and C) are reasons why financial intermediaries exist.

Financial Intermediaries Exist Because Small Investors Cannot Efficiently ________