When One Firm Merges with Another, The

question 44

Multiple Choice

When one firm merges with another, the:

• A) boards of directors will merge also.
• B) merger must be approved by 75% of the shareholders of the target firm.
• C) assets will be merged but the liabilities will not.
• D)target firm will cease to exist.

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Definitions:

Risky Portfolio

An investment portfolio that contains assets with a higher degree of volatility and potential for loss, aiming for higher returns.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data points.

Sharpe Ratio

A measure that indicates the average return earned in excess of the risk-free rate per unit of volatility or total risk, assessing the performance of an investment.

Risk Aversion

The preference to avoid uncertainty and potential financial loss.