Which One of the Following Is an Example of a Financial

question 113

Multiple Choice

Which one of the following is an example of a financial investment but not an economic investment?

• A)renovating a shopping mall
• B)constructing an addition to a petroleum refinery
• C)building a new store
• D)buying gold to sell later at a higher price

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Definitions:

Spin-Off

The distribution of shares in a subsidiary to existing parent company shareholders.

Subsidiary

A company that is completely or partly owned and partly or entirely controlled by another company, known as the parent company.

Shareholders

Individuals or entities that own shares in a corporation, thus holding a portion of the corporation's ownership.

Poison Pill

A defensive strategy used by companies to deter hostile takeovers by making the company less attractive to the potential acquirer.