When There Is No Intermediate Market

question 17

Multiple Choice

When there is no intermediate market:

• A) there is no optimal transfer price.
• B) the selling division cannot transfer its goods internally.
• C) the buying division cannot purchase its goods externally.
• D) there is no reason for top management to intervene in transfer pricing disputes.

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Definitions:

Macroeconomic Risks

Considered broad economic or political uncertainties that could affect the performance of financial markets and investments globally.

Security Selection

The process of choosing individual securities for investment with the goal of achieving the best possible return for a given level of risk.

Passive Strategy

A portfolio decision that avoids any direct or indirect security analysis. See passive management.

Index Funds

Investment funds designed to replicate and track the components of a market index.