The Risk for Firms That Follow the Unrelated Diversification Strategy

question 81

Multiple Choice

The risk for firms that follow the unrelated diversification strategy in developed economies is that:

• A) external investors tend to dump the stocks of conglomerates during economic downturns.
• B) conglomerates are typically owned by one powerful entrepreneur and do not survive his/her retirement or death.
• C) government regulations, especially in Europe, have periodically forced the dissolution of conglomerates.
• D) competitors can imitate financial economies more easily than they imitate economies of scope.

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Definitions:

Tissues

Groups of similar cells that perform specific functions in an organism.

Dominant Gene

A gene that expresses its phenotypic effect even when heterozygous with a recessive gene, therefore overriding recessive gene characteristics.

Genetic Map

A chart that shows the relative positions of genes and genetic markers on a chromosome based on the frequency of recombination between markers.

Genetic Counseling

A service that provides individuals and families with information on the nature, inheritance, and implications of genetic disorders to help them make informed medical and personal decisions.