Individuals May Find It More Advantageous to Purchase Claims from a Financial

question 20

Multiple Choice

Individuals may find it more advantageous to purchase claims from a financial intermediary rather than directly purchasing claims in capital markets because:
I. Intermediaries are better diversified than most individuals.
II. Intermediaries can exploit economies of scale in investing that individual investors cannot.
III. Intermediated investments usually offer higher rates of return than direct capital market claims.

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Consent

Agreement or permission given for something to happen or be done, often after consideration and understanding of implications.

Despondent

A state of feeling profound hopelessness, dejection, or despair.

Psychological Issues

Mental health challenges that affect mood, thinking, and behavior.

Coping

The use of strategies to manage stressful or difficult situations, emotions, and thoughts in an attempt to maintain psychological well-being.