A Company May Purchase a Noncontrolling Interest in Another Firm

question 106

Multiple Choice

A company may purchase a noncontrolling interest in another firm in a related industry

• A) to house excess cash until needed.
• B) to generate earnings.
• C) for strategic reasons.
• D) for speculative reasons.

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Definitions:

Money

A medium of exchange that facilitates transactions, acting as a unit of account, a store of value, and sometimes, a standard of deferred payment.

Stock of Money

The total quantity of money available in the economy at a particular time, including cash and deposits.

Price Level

A measure of prices in a given month or year in relation to prices in a base year.

Medium of Exchange

A mechanism or item used to facilitate trade by avoiding the limitations of barter, such as currency or digital forms of money.