When a financial institution provides a standardized financial product such as a mortgage, it is
A) reducing information costs.
B) reducing transaction costs.
C) spreading risk.
D) preventing fraud.

Question

Quizplus · Accepted Answer

Standardized financial products such as mortgages reduce transaction costs for both the financial institution and the borrower. By having a standard product, the institution can streamline its processes and lower its costs, while borrowers can easily compare products and shop around for the best deal.

When a Financial Institution Provides a Standardized Financial Product Such