Where an Investor Sells Inventory to an Associate in a Prior

question 13

Multiple Choice

Where an investor sells inventory to an associate in a prior year and the inventory is sold by the associate during the current year the investment in associate account is:

• A)unaffected;
• B)decreased by the investor's share of the realised profit;
• C)increased by the investor's share of the realised profit;
• D)increased by the full amount of the realised profit.

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Definitions:

Industrial Production

A measure of the output of the industrial sector of the economy, encompassing manufacturing, mining, and utilities.

Firm Size

A measure that typically reflects a company's scale of operations, often indicated by its total revenue, assets, or number of employees.

Risk Premium

The risk premium is the extra return above the risk-free rate that investors require to compensate for the risk of holding a risky asset.

Risk Aversion

The tendency of investors to prefer safer investments over riskier ones, indicating their reluctance to take on investments that carry a higher chance of losing value.