Individual investors can reduce transactions costs by
A)buying common stock rather than bonds.
B)combining their purchases through an intermediary.
C)common stocks directly, rather than through a mutual fund.
D)making loans directly, rather than depositing funds in a bank.

Question

Quizplus · Accepted Answer

By combining their purchases through an intermediary such as a discount brokerage or robo-advisor, individual investors can benefit from economies of scale and lower transaction costs compared to making individual trades on their own. This allows them to invest in a diversified portfolio without incurring excessive costs.

Individual Investors Can Reduce Transactions Costs by