Pearson eText Economics of Money, Banking and Financial Markets, The, Business School Edition -- Instant Access (Pearson+)
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Chapter 8, Problem 4Q
To determine

Why are financial intermediaries willing to engage in information collection activities when investors in financial instruments may be unwilling to do so?

Concept Introduction:

Financial intermediaries provide different financial instruments to their clients. They provide private debt instruments of various types to individual borrowers. The investors on the other hand invest in market securities issued by government or other business organizations and usually follow the flow of the market. This means that an investor will invest in a security which is most popular among other investors.

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