True/False. For each part, explain your answer regardless of whether it is true or false. Financial...

True/False. For each part, explain your answer regardless of whether it is true or false.

Financial intermediaries are typically willing to put more effort into monitoring than individual investors.

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Expert Solution

True.

Financial intermediaries will put more effort in the market than individual investors. These institutions will act as the middleman which helps to create efficient market system. These intermediaries will reduce the cost of doing businesses. At the same time, these intermediaries will not accept deposits from public. They will pool the savings which scattered around the economy and invest this savings in variety of financial securities. The major functions of this intermediaries are pooling of resources, providing safekeeping for account services, give access to payment system, supply of liquidity to the market, diversification of small investments and the collection and distribution of information regarding the changes occurred in the economy and the whole financial system. Asset storage, regulations, investment advices, bringing stability in the capital market, risk reduction etc. are the major features of this institutions.

Rahul Sunny answered 1 year ago

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