Firms Following an Unrelated Diversification Strategy Can Reduce Their Overall

question 47

Multiple Choice

Firms following an unrelated diversification strategy can reduce their overall risk when:

• A) resources are allocated among many businesses with different risk profiles.
• B) they limit their growth to acquiring only successful companies.
• C) synergies are developed among the business units.
• D) management refuses to purchase businesses outside their sphere of expertise or knowledge.

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Definitions:

Practical Intelligence

Intelligence that relates to the ability to solve everyday problems by utilizing knowledge gained from experience.

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Practical knowledge and skills gained from experience outside formal learning environments, often related to urban survival.

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The ability to assess problems logically, evaluate solutions, and make rational decisions.

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