Which of the Following Statements Is an Advantage of Related

question 31

Multiple Choice

 Which of the following statements is an advantage of related diversification strategy?

• A) Related diversification strategy allows a firm to maintain several businesses that are not connected in any way.
• B) The sharing of resources is a key component of developing economies of scope and often increases a firm's competitive advantage.
• C) Related diversification strategies often achieve financial economies through the restructuring of business units.
• D) Related diversification strategy can allow a sick or dying company to use capital generated in a profitable division to prop it up for a short period of time.

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Definitions:

Health Costs

Expenses associated with maintaining, improving, or treating an individual’s health, including medical care, medication, and hospitalization.

Moral Hazard

Moral hazard occurs when one party in an agreement can take risks because the negative consequences of their actions will be borne by another party.

Expected Value

The anticipated value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence.

Health Care Costs

Refers to the expenses associated with medical services, including prevention, treatment, rehabilitation, and health maintenance.