An Example of an Active Investment Is the Licensing of Technology

question 63

True/False

An example of an active investment is the licensing of technology to a foreign firm.

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Definitions:

Common Dividends

Payments made by a corporation to its common shareholders from its after-tax profits.

Professional Judgement

Professional Judgement involves applying expertise, knowledge, and experience to make informed decisions and assessments in the context of accounting and auditing.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur, providing a more accurate picture of a company's financial health.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio or a company's product line to minimize risks.