An Unrelated Diversification Strategy Can Create Value Through Two Types

question 37

True/False

An unrelated diversification strategy can create value through two types of financial economies: (1) efficient internal capital allocations and (2) purchasing other corporations and restructuring their assets.

---

Definitions:

Comprehensive Income

The total change in equity for a business enterprise during a period from transactions and other events from non-owner sources.

Available-For-Sale Securities

Financial investments that a company holds with the intent of selling for a profit but are not actively traded or held to maturity.

Unrealized Loss

A loss that occurs on paper due to the decrease in value of an investment but has not yet been realized through actual sale or exchange.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenue. It is often referred to as the bottom line.