Which of the Following Would NOT Normally Be Considered a Motive

question 26

Multiple Choice

Which of the following would NOT normally be considered a motive for making an equity investment in another corporation?

• A) to invest surplus cash
• B) use of the investment for expanding its own operations
• C) use of the investment to diversify its own operations
• D) an increase in the amount of interest revenue from the equity investment

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Definitions:

Shortage

A situation in which quantity demanded is greater than quantity supplied.

Purchasing-Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, suggesting that exchange rates should adjust so that identical goods cost the same in different countries.

Foreign-Currency Exchange

The process of converting one country's currency into another, facilitating international trade and investment through varying exchange rates.

Demand Curve

A graph of the relationship between the price of a good and the quantity demanded.