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A saver holding a diversified portfolio can achieve the same risk reduction as she could get by pooling her money with other savers via an
A saver holding a diversified portfolio can achieve the same risk reduction as she could get by pooling her money with other savers via an intermediary. Why might the saver prefer to use the intermediary? Can you explain this? (Hint: the nature of monitoring costs should play a rolle in your answer.)
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