Question

Financial institutions:

Answer 1

Financial institutions:

A) reduce information costs, set interest rates for bonds, and diversify assets

Explanation:

From the options given here one can see that there are a set of things that are interrelated that financial institutions are supposed to do.

The prime ones out of these are to

- Reduce information cost

- Set interest rates for the bonds of the institution government and others too essentially.

- Diversify the assets.

This does not include actually pooling the funds which is something only the people who are investing can do.

Thus, the first option looks the correct one here.