Which of the Following Statements Is True Concerning Variable Interest

question 43

Multiple Choice

Which of the following statements is true concerning variable interest entities (VIEs) ?
1) The role of the VIE equity investors can be fairly minor.
2) A VIE may be created specifically to benefit its sponsoring firm with low-cost financing.
3) VIE governing agreements often limit activities and decision making.
4) VIEs usually have a well-defined and limited business activity.

• A) 2 and 4.
• B) 2, 3, and 4.
• C) 1, 2, and 4.
• D) 1, 2, and 3.
• E) 1, 2, 3, and 4.

---

Definitions:

Repealed

The act of revoking or withdrawing a law, order, or agreement.

Constitution

The basic rules or longstanding traditions that dictate how a state or another entity is regulated.

Amendments

Formal alterations or additions made to the U.S. Constitution, requiring a rigorous ratification process to become part of the document.

Successful Amendments

Changes or additions to a legal document or constitution that have been accepted and implemented.