One reason that financial intermediaries exist is that they:

Question

Quizplus · Accepted Answer

Financial intermediaries exist because they have developed low-cost methods to obtain information, such as conducting credit checks and analyzing financial statements, making it easier for investors to lend money or buy securities. They also provide other services, such as diversification of risk, liquidity, and transformation of maturities. While government regulation may play a role in the existence of some financial intermediaries, it is not the primary reason for their existence. Financial intermediaries do not earn high returns from lending their own funds, as their profits come from the fees and commissions they charge for their services.

One Reason That Financial Intermediaries Exist Is That They