Which of the Following Is an Important Appeal of a Related

question 72

Multiple Choice

Which of the following is an important appeal of a related diversification strategy?

• A) It represents an effective way of capturing valuable financial fit benefits.
• B) It offers opportunities to transfer skills,expertise,technical know-how,or other capabilities from one business to another.
• C) It offers significant opportunities to strongly differentiate a company's product offerings from those of rivals.
• D) It is more likely to pass the cost-of-entry test and the capital gains test than unrelated diversification.
• E) It is typically more profitable than unrelated diversification,which is a major factor in helping related diversification pass the attractiveness test.

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Definitions:

Funded Status

A measure of the financial health of a pension plan, indicating the difference between plan assets and liabilities.

Actuarial Value

A measure of the average amount of benefit a health insurance plan is expected to pay, used to compare different health insurance policies.

Actuary

A professional who analyzes financial risk using mathematics, statistics, and financial theory, mostly in the insurance and pension plan industries.

Expected Return

The anticipated amount of profit or loss an investment generates over a given period of time.