Which of the Following Is Not a Reason for a Parent

question 44

Multiple Choice

Which of the following is not a reason for a parent to lose control of a subsidiary?

• A) when the parent makes a decision to sell its controlling interest in the subsidiary to another party
• B) where the subsidiary issues additional shares to parties other than the parent
• C) the expiry of a contractual agreement that previously permitted the parent entity to control a subsidiary
• D) All of the choices could be a reason for the parent to lose control.

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Definitions:

Required Reserve Ratio

A mandated reserve that banks must keep on hand, usually a percentage of their deposits, determined by the central bank to ensure financial stability.

Checkable Deposits

Checkable deposits are bank account balances that depositors can easily withdraw or write checks against at any time, constituting a primary medium of exchange for personal and business transactions.

Required Reserve Ratio

The proportion of depositors' balances banks must have on hand as cash, mandated by the central bank.

Excess Reserves

The reserves held by banks that are greater than the minimum amounts required by regulators, which can be lent out or invested.