Which of the following is an advantage to an FI of expanding globally?
A)Exposure to nationalization or expropriation.
B)Economies of scale.
C)High fixed costs.
D)Costs of complying with different regulatory requirements.
E)Information and monitoring costs.

Question

Quizplus · Accepted Answer

Economies of scale are an advantage to an FI of expanding globally. By increasing its size and scope, an FI can spread fixed costs over a larger base of operations while also benefiting from increased purchasing power and improved efficiency. This can lead to lower operating costs and increased profitability. However, the other choices (A, C, D, E) are potential disadvantages that an FI may face when expanding globally.

Which of the Following Is an Advantage to an FI