Which of the Following Benefits of Diversification Explains the Idea

question 7

Multiple Choice

Which of the following benefits of diversification explains the idea that a multiproduct firm is an efficient choice when the costs of doing business complicate inter-firm coordination?

• A)Use of internal capital markets
• B)Economies of scale and scope
• C)Economizing on transaction costs
• D)Diversifying shareholder portfolios
• E)Identifying undervalued firms

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Definitions:

Suggestive Descriptions

Narrative or descriptive language that implies or leads to a particular mental image or conclusion.

Explicit Descriptions

Detailed and clear statements or explanations that leave no room for confusion or ambiguity.

Paraphilia

Atypical sexual interests that may involve non-consenting partners, the experience of distress, or a risk of harm.

Paraphilic Disorder

A psychological disorder where sexual activity is associated with a paraphilia (atypical sexual interest, arousal, and/or behavior), causing distress in the person or others and impairing the person’s life; may cause the person to pursue sexual activity without consent.