Holding Companies Enable a Parent to Control a Subsidiary Without

question 10

True/False

Holding companies enable a parent to control a subsidiary without owning all of its stock. As a general rule, 25% ownership of a widely held company virtually guarantees control.

---

Definitions:

Poisson Approximation

A statistical technique used to approximate the probabilities of events with a very low probability over a large number of trials.

Binomial Random Variable

A type of random variable that takes the number of successes in a fixed number of trials of a binomial experiment, where each trial results in a success or failure, with the probability of success being the same for all trials.

Cumulative Binomial Probabilities

The sum of the probabilities of obtaining all outcomes up to a specified point in a binomial distribution.

Random Variable

A variable whose values are outcomes of a random phenomenon.