In a Business Combination

question 8

Multiple Choice

In a business combination:

• A) it is not necessary to identify the acquirer as long as parent entity has been identified;
• B) the parent entity will always be the acquirer;
• C) the accounting acquirer is the entity that becomes the controlling entity;
• D) the legal acquirer is the entity that becomes the controlling entity.

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Definitions:

Global Minimum Variance Portfolio

A portfolio construction strategy aimed at minimizing the volatility of returns by selecting a combination of investments that as a whole have the lowest possible risk.

Standard Deviation

A statistical measure of the dispersion or variability of a set of values, often used to quantify the risk associated with a particular investment or portfolio.

Optimal Risky Portfolio

According to modern portfolio theory, this portfolio provides the maximum expected return for a specific risk level or minimizes the risk for a set expected return.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, commonly used in finance to quantify the risk associated with a given investment.