A Firm Will Likely Benefit Most from Diversifying If

question 17

Multiple Choice

A firm will likely benefit most from diversifying if:

• A) the correlations between country economies are high.
• B) the correlations between country economies are low.
• C) the variability of all country economy levels is high.
• D) B and C

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Definitions:

Town Division

A specialized segment within a larger organization or a local government area, focused on managing and providing services to a specific geographic area.

Country Division

A segment or unit of a company that operates in a specific country, responsible for tailoring operations to the local market.

Fixed Expenses

Costs that do not change with the level of production or sales, such as rent and salaries.

Absorption Costing

A technique in accounting where all expenses from manufacturing, covering direct materials, direct labor, and overhead expenses variable and fixed, are included in the cost of a product.