A Firm Will Likely Benefit Most from Diversifying If

question 17

Multiple Choice

A firm will likely benefit most from diversifying if:

• A) the correlations between country economies are high.
• B) the correlations between country economies are low.
• C) the variability of all country economy levels is high.
• D) B and C

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Definitions:

Supermajority Shareholder Voting

A voting requirement that exceeds the threshold of a simple majority, often used for significant decisions in a corporation.

Hostile Takeover

An attempt by a company or individual to acquire another company against the wishes of the target company's management and board of directors.

Voting Trust

An arrangement where the shares of a company's stock are placed under the control of a trustee, often to consolidate voting power or to make unified decisions on behalf of the shareholders.

Directors

Individuals elected by shareholders to oversee the management of a corporation and make major decisions.