Economies of scale refer to an FI's ability to
A. lower its average costs of operations by expanding its output of financial services.
B. generate cost synergies by producing more than one output with the same inputs.
C. understand each risk and its interaction with other risks.
D. finance its assets completely with borrowed funds.
E. moderate the long-tailed downside risk of the return distribution.
Ans: A. lower its average costs of operations by expanding its output of financial services.
Business
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