Which of the followings is NOT an advantage of financial institutions in consumption smoothing? A. They help to solve moral hazard and adverse selection issues. B. They help to share risks. C. They help to reduce transaction costs. D. They help to create more jobs.
Which of the followings is NOT an advantage of financial institutions in consumption smoothing? A. They help to solve moral hazard and adverse selection issues. B. They help to share risks. C. They help to reduce transaction costs. D. They help to create more jobs.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Which of the followings is NOT an advantage of financial institutions in consumption
smoothing?
A. They help to solve moral hazard and adverse selection issues.
B. They help to share risks.
C. They help to reduce transaction costs.
D. They help to create more jobs.
Expert Solution
Step 1
Financial Institutions
Institutions involved in financial transactions such as lending and borrowing are called financial institutions. It provides varieties of functions such as helping in capital formation for companies, providing pension fund services, etc.
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