Why Do Households Prefer to Use FIs as Intermediaries to Invest

Multiple Choice

Why do households prefer to use FIs as intermediaries to invest their surplus funds?

A) Transaction costs are low to the household since FIs are more efficient in monitoring and gathering investment information.
B) To receive the benefits of diversification that households may not be able to achieve on their own.
C) The FI has can benefit from combining funds and negotiating lower asset prices and transactions costs.
D) The FI can provide insurance at relatively low cost that will protect funds under management.
E) All of the options.