Question

In: Finance

​Financial intermediaries are able to be profitable due to

Financial intermediaries are able to be profitable due to

A. economies of scale.

B. the ability to manage credit risk.

C. good control of transactions costs.

D. All of the above

Solutions

Expert Solution

The financial intermediaries enjoys 3 major competitive advantages:

  • Economies of Scale : A large number of transactions
  • Transaction Cost Control : Have a good control of transaction costs.
  • Risk Management Expertise : have a ability to manage credit risk.

jeff jeffy answered 2 years ago
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