Which of the Following Is TRUE

question 134

Multiple Choice

Which of the following is TRUE?

• A) Conglomerates no longer exist in the U.S. business scene, but are common in emerging markets.
• B) Unrelated diversified firms seek to create value through economies of scope.
• C) The sharing of intangible resources, such as know-how, between firms is a type of operational sharing in related diversifications.
• D) Related constrained firms share more tangible resources and activities between businesses than do related linked firms.

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Definitions:

Compounded Monthly

An interest calculation method where interest earned is added to the principal each month, affecting subsequent interest calculations.

Effective Rate

The actual annual interest rate that accounts for compounding over a given period, providing a true reflection of the financial cost or benefit.

Nominal Rate

The stated interest rate of a financial instrument, without adjustment for inflation or compounding frequencies.

Compounded Monthly

The method of computing interest that includes both the original amount and the interest accrued over past months, applied each month.