Royal Motor Corp

question 94

Multiple Choice

Royal Motor Corp. generates a major portion of its revenues by manufacturing luxury sports cars. However, the company also derives an insignificant percent of its annual revenues by selling its sports merchandise that includes apparel, shoes, and other accessories under the same brand name. Which of the following terms best describes Royal Motor Corp.?

• A) a conglomerate
• B) a subsidiary
• C) a dominant-business firm
• D) a single-business firm

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Definitions:

Bearer Instrument

A bearer instrument is a type of document that allows the holder to claim the rights or assets it represents without endorsing or proving ownership.

Order Instrument

A financial document that is payable to a specified person or entity, such as a check, which requires endorsement for cashing or deposit.

Endorsed

Officially approved or supported, or signed on the back to transfer ownership or to show agreement.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned from one party to another in a manner that the transferee obtains a good title.