Which of the Following Benefits of Diversification Explains the Idea

question 15

Multiple Choice

Which of the following benefits of diversification explains the idea that mergers are more likely when there is an expectation of positive changes in market share?

• 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:

Adam Smith

An 18th-century Scottish economist and philosopher, best known as the author of "The Wealth of Nations" and as the father of modern economics.

Amerigo Vespucci

An Italian merchant, explorer, and navigator from the Republic of Florence, who is best known for his namesake of the continents of North and South America.

Zheng He

A Chinese mariner, explorer, diplomat, and fleet admiral who commanded expeditionary voyages to Southeast Asia, the Middle East, and East Africa from 1405 to 1433.

Borderland

A region near or along a border that often embodies a blend of cultures, identities, and political tensions.