Which of the Following Is the Best Definition of Diversification

question 75

Multiple Choice

Which of the following is the best definition of diversification?

• A) The sale of stock in a wholly owned subsidiary via an IPO.
• B) A targeted share repurchase method.
• C) The sale of assets, operations, divisions, and/or segments of a business to a third party.
• D) Investment in more than one asset; returns do not move proportionally in the same direction at the same time, thus reducing risk.
• E) Rules and practices relating to how corporations are governed by management, directors, and shareholders.

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Definitions:

Target Point

A pre-determined objective or value that serves as a reference for performance or negotiation.

Impasse

A situation in negotiation where no progress can be made or no advancement is possible.

American Federation of Labor

A historic national federation of labor unions in the United States, founded in 1886 to advance the interests of skilled workers.

Skilled Labor

Refers to workers who possess specialized training, knowledge, and experience needed to perform specific tasks or jobs.