Which Type of Multinational Diversification Occurs When the Parent Firm

question 83

Multiple Choice

Which type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce intermediate goods going into the production of finished goods?

• A) forward vertical integration
• B) backward vertical integration
• C) forward horizontal integration
• D) backward horizontal integration

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Definitions:

Annual Interest

The amount of interest due over the course of a year on a loan or investment, calculated as a percentage of the principal.

Bank Account

A financial account maintained by a bank for a customer, allowing for the management, deposit, and withdrawal of funds.

Payment Stream

A series of periodic payments that may be constant or variable, over time, often associated with loans or investments.

Discount Rate

In finance, the interest rate used to determine the present value of future cash flows, or in central banking, the rate charged to commercial banks for loans from the central bank.