Which of the Following Statements Is False Concerning Variable Interest

question 60

Multiple Choice

Which of the following statements is false concerning variable interest entities (VIEs) ?

• A) Sometimes VIEs do not have independent management.
• B) Most VIEs are established for valid business purposes.
• C) VIEs may be formed as a source of low-cost financing.
• D) VIEs have little need for voting stock.
• E) A VIE cannot take the legal form of a partnership or corporation.

---

Definitions:

Differentiated Products

Goods or services that are distinguished from each other by specific features, branding, or quality, making them non-perfect substitutes in the eyes of consumers.

Competitive Market

A market structure characterized by a large number of buyers and sellers, wherein no single entity has significant power to dictate market conditions.

Free Entry

is a market condition where any business can enter the industry without facing significant barriers, promoting competition.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity demanded.