Small savers face
A)low transactions costs in financial markets.
B)high transactions costs in financial intermediaries.
C)low transactions costs in financial intermediaries.
D)low information costs in financial intermediaries, but high transactions costs.

Question

Quizplus · Accepted Answer

Financial intermediaries, such as banks and credit unions, often offer lower transactions costs to small savers than financial markets. This is because financial intermediaries can bundle small savers' savings with others and invest in larger, more diversified investments, reducing the overall transactions costs. Additionally, financial intermediaries may offer higher interest rates or other incentives to attract small savers.

Small Savers Face