An advantage financial institutions have over individual household investors is that they are able to diversify away credit risk by holding a large portfolio of loans provided to different entities. This reduces Group of answer choices firm-specific credit risk. political risk. interest rate risk. market risk. systematic credit risk.

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.