Two Years Ago, Jason Jennings and Mary Scott Each Owned

question 42

Multiple Choice

Two years ago, Jason Jennings and Mary Scott each owned a small chain of bagel restaurants in Orange County, California. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain. What Jason and Mary did with their firms is called a(n) :

• A) licensing agreement
• B) strategic alliance
• C) acquisition
• D) joint venture
• E) merger

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Definitions:

Fair Value

An estimated market price of an asset or liability, reflecting the value for which it could be exchanged or settled between knowledgeable, willing parties.

Bond Investment

Buying bonds as a way to generate income through interest payments, representing a loan from the investor to the issuer.

Market Yield

The annual income return on an investment, expressed as a percentage of the market price.

Trading Security

A financial instrument, such as stocks or bonds, held by an entity for the purpose of selling them in the near term to generate income through price appreciation.