Consider the Following Two Statements: (I) in a Consolidation of fiRms

question 78

Multiple Choice

Consider the following two statements: (i) In a consolidation of firms A and B, firm A's shareholders are given shares of firm B and vice
Versa.
(ii) In a consolidation of firms A and B, both firms merge their assets.

• A)(i) is correct, (ii) is incorrect.
• B)(ii) is correct, (i) is incorrect.
• C)Both (i) and (ii) are correct.
• D)Both (i) and (ii) are incorrect.
• E)A consolidation is the same as a merger.

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock, bond, or other instrument at a specified price within a specific time period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time frame.

Fixed Price

A predetermined price at which goods and services are sold, not subject to change based on fluctuations in market demand or supply.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an underlying stock, bond, commodity, or other assets at a specified price within a specific time period.