Which of the Following Is True About Passive Investments

question 19

Multiple Choice

Which of the following is true about passive investments?

• A) These investments must not have any voting rights.
• B) The investing company must usually own less than 20% of the voting stock in the investee and these investments must be reported at market value on the balance sheet even though the historical cost principal is violated.
• C) The investing company usually owns less than 20% of the voting stock in the investee and they are reported on the balance sheet at cost.
• D) The market value method requires realized gains and losses to be recognized on the income.

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Definitions:

Jung

Refers to Carl Jung, a Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts such as the collective unconscious and archetypes.

Entropy Principle

A concept often related to thermodynamics and information theory, referring to the measure of disorder or randomness in a system. In psychology, it may relate to the complexity and unpredictability of human behavior and thought.

Differentiation Principle

In psychology, this refers to the process through which individuals develop a stronger sense of self by distinguishing themselves from others.

Opposition Principle

Jung’s idea that conflict between opposing processes or tendencies is necessary to generate psychic energy.