Which of the Following Best Describes Synergy

question 26

Multiple Choice

Which of the following best describes synergy?

• A) It is the process by which some people avoid responsibility by "free-riding" in groups.
• B) It is the process of creating a whole greater than the sum of its individual parts.
• C) It is the process of analyzing business opportunities according to market growth rate and market share.
• D) It is the process that analyzes the strengths, weaknesses, opportunities, and threats involved in a business.
• E) It is the process that seeks the lowest costs of operations within a special market segment.

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Definitions:

Firm-specific Risk

The portion of an asset's risk that is attributable to the company's individual factors, uncorrelated with general market movements.

Nonsystematic Risk

The part of an investment's risk that is specific to the investment, unrelated to the market's overall movements.

Diversification

The strategy of spreading investments across various financial assets to reduce exposure to risk.

Uncorrelated

Refers to two or more variables that do not have any predictive relationship with each other.