Which of the Following Is True of a Strategic Merger

question 158

Multiple Choice

Which of the following is true of a strategic merger?

• A)It is undertaken to make money by selling the acquired firm piece by piece.
• B)It is undertaken to enhance the business position of the acquiring company.
• C)It never has an effect on competition in the acquirer's industry.
• D)It usually involves business acquisitions in a completely different industry.

---

Definitions:

Call Option

An agreement in finance which allows the purchaser to have the option, but not the commitment, to purchase a certain amount of a specific asset at a pre-agreed price during a fixed period.

Specified Price

A predetermined price set in a contract or agreement, often related to sales or financial instruments.

Perfect-Hedging

A risk management strategy that completely eliminates the risk associated with an investment by taking an equal but opposite position in the derivatives market.

Hedging

A risk management strategy used to offset potential losses or gains in an investment by taking an opposite position in a related asset.