Final answer:
Institutional investors are important in today's business world because they provide stability and liquidity to the market, have a long-term investment horizon, and can influence corporate governance.
Step-by-step explanation:
Institutional investors are important in today's business world for several reasons. Firstly, they provide stability and liquidity to the market by buying and selling large amounts of securities. This helps to ensure that there is a constant flow of capital in the market, which is essential for the smooth functioning of the economy.
Secondly, institutional investors typically have a long-term investment horizon. They are not looking for quick profits, but rather aim to build wealth over time. This long-term approach can help to stabilize the market and reduce short-term volatility.
Lastly, institutional investors have significant influence over corporate governance. They often hold large stakes in companies and can use their voting power to influence company decisions and hold management accountable. This can help to improve corporate transparency and protect the interests of shareholders.
Therefore, the correct answer is 4) All of the above.