Question

Financial markets:____________.

a. reduce diversification.
b. increase transaction costs.
c. determine tax rates.
d. provide liquidity.

Answer 1

b. increase transaction costs & d. provide liquidity.

Step-by-step 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.