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.

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Definitions:

Risky Behavior

Actions or activities that involve a significant chance of causing physical or psychological harm.

Risky Behavior

Actions that expose individuals to harm or significant risk of negative outcomes.

Dissonance

A conflict or lack of harmony between beliefs, ideas, or values.

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