A Consolidation Is the Combining of fiRms Such That

question 281

Multiple Choice

A consolidation is the combining of firms such that:

• A) The acquired firm is completely absorbed by the acquirer such that the acquired firm ceases to exist.
• B) The bidder and the target firms are unrelated.
• C) A new firm is created and both the acquired and the acquiring firms cease to exist.
• D) Vertical integration occurs.
• E) Horizontal integration occurs.

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Definitions:

Federal Reserve

The primary banking authority in the United States, tasked with overseeing monetary policy, regulating banks, and providing financial services.

Central Bank

A national financial institution that provides financial and banking services for its country’s government and commercial banking system, and implements the government’s monetary policy.

Regulating Banks

The process of establishing and enforcing rules and standards that govern the banking industry to ensure stability and protect consumers.

Banking System

The banking system consists of a network of banks and financial institutions that provide financial services, including managing deposits, lending, and currency exchange.