Which of the Following Is the Best Definition of Diversification

question 111

Multiple Choice

Which of the following is the best definition of diversification?

• A) The sale of stock in a wholly owned subsidiary via an IPO.
• B) A targeted share repurchase method.
• C) The sale of assets, operations, divisions, and/or segments of a business to a third party.
• D) Investment in more than one asset; returns do not move proportionally in the same direction at the same time, thus reducing risk.
• E) Rules and practices relating to how corporations are governed by management, directors, and shareholders.

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Definitions:

National Norms

Statistical standards that represent the average performance or behavior of a specific national population, often used in standardized testing.

Mode

The value that appears most frequently in a data set, a measure of central tendency in statistics.

Interquartile Range

A measure of variability in statistics, calculated by subtracting the value at the first quartile from the value at the third quartile, reflecting the spread of the middle 50% of data points.

National Counseling Exam

A comprehensive assessment administered to evaluate the knowledge and skills of those seeking to become licensed professional counselors.