Why Do Households Prefer to Use FIs as Intermediaries to Invest

question 64

Multiple Choice

Why do households prefer to use FIs as intermediaries to invest their surplus funds?

• A)Transaction costs are low to the household since FIs are more efficient in monitoring and gathering investment information.
• B)To receive the benefits of diversification that households may not be able to achieve on their own.
• C)The FI can benefit from combining funds and negotiating lower asset prices and transaction costs
• D)All of the listed options are correct.

---

Definitions:

Organization of Work

The arrangement and management of work tasks, workforce, and resources in an entity to maximize efficiency and achieve objectives.

American Society

Refers to the social structure, cultural norms, and values that characterize the United States of America and its inhabitants.

Scientific Revolution

The Scientific Revolution began in Europe about 1550. It encouraged the view that sound conclusions about the workings of society must be based on solid evidence, not just speculation.

Organizing Society

The ways in which social structures and institutions are arranged and managed to form a functioning community or society.