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Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
8th Edition
ISBN: 9781337368087
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 2QR
To determine
Why diversification of holdings is recommended and which institution does it for the public.
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Why is it important for people who own stocks and bonds to diversify their holdings? What type of financial institution makes diversification easier?
Which has a higher average return over time: stocks, bonds, or a savings account? Explain your answer.
Why is it so important to an economy to have fully developed financial markets?
Chapter 18 Solutions
Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
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- Economists assert that financial markets serve the function of efficiently allocating capital. What is meant by the function? Explain and include an example.arrow_forwardWould the interest rate increase be more likely to hurt or help the financial institution’s profitability?arrow_forwardWhich type of financial intermediary provides individual investors with professional management of their money and diversification in order to limit the risk of investing? A. mutual funds B. insurance companies C. hedge funds D. investment banksarrow_forward
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