One Reason for the Increasing Proportion of Total Financial Assets

question 28

True/False

One reason for the increasing proportion of total financial assets controlled by pension funds and investment companies is that these intermediaries exploit the comparative advantages of size and diversification.

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Definitions:

Fixed Cost

Costs that remain constant in total regardless of changes in the level of activity within a relevant range, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or service activity.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Direct Labor

The wages and salaries for those employees directly involved in the manufacturing process of a company's products.