Financial intermediaries exist because small investors cannot efficiently

A) diversify their portfolios.
B) assess credit risk of borrowers.
C) advertise for needed investments.
D) diversify their portfolios and assess credit risk of borrowers.
E) All of the options.

Financial Intermediaries

Institutions that act as middlemen in financial markets, facilitating transactions between borrowers and lenders or investors.

Credit Risk

The risk that a borrower may default on any type of debt by failing to make required payments.

Diversify

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single investment's poor performance.