Question

Your friend Ed has a money market mutual fund account, automatic deposit of his paycheck into an interest-bearing checking account at the company credit union, and a CD form the local branch of a bank that advertises "coast to coast" banking. What is the benefit of "mixing and matching" financial institutions and their services?

Answer 1

Answer and explanation:

"Mixing and Matching" financial institutions are those that take their customers' money and link different investment vehicles with the customer's expectations, diversifying risk compared to having the money in only one asset. The benefit of using financial institutions as middlemen relies on the cost of accessing the securities since they are much lower for individual investors. Besides, customers receive an assessment from professionals on what to invest in but sometimes this implies paying an additional fee.