Question

Financial markets:____________.
a. reduce diversification.
b. increase transaction costs.
c. determine tax rates.
d. provide liquidity.

Answer 1

Answer:

b. increase transaction costs & d. provide liquidity.

Explanation:

Financial markets reduce diversification and provides liquidity. The market provides means for reduce diversification (reducing risk for borrowers & lenders) and also enhancing liquidity for borrowers & lenders as well.