Diversification

question 6

Multiple Choice

Diversification:

• A) reduces the likelihood that bad things will happen.
• B) means you're not likely going to be completely ruined by a single unfortunate event.
• C) increases the likelihood that bad things will happen.
• D) None of these statements is true.

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Definitions:

Non-controlling Interest

The share of ownership in a subsidiary that doesn't belong to the parent company.

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries, presenting them as a single economic entity.

Cost Method

An accounting approach where investments are recorded at their original purchase cost, only adjusting for impairment or sale.

Intercompany Sales

Transactions involving the exchange of goods or services between entities within the same parent company.