21-88 Concern about the cost of managing a widely diversified financial company has been used to justify product segmentation on the grounds of

Question

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Product segmentation can help achieve economy of scale and scope, which can reduce the cost of managing a diversified financial company. By focusing on specific product lines, the company can more efficiently allocate its resources and improve its overall profitability. Safety and soundness, conflict of interest, deposit insurance, and regulatory oversight issues may also be considerations for financial companies, but they do not necessarily justify product segmentation on their own.

21-88 Concern About the Cost of Managing a Widely Diversified