Which of the following is the most accurate?
A) Non-strategic investments maintain a long-term operating relationship with another company.
B) Non-strategic investments are purchased to generate investment income.
C) Preferred shares and common shares are debt instruments.
D) Strategic investments are always short-term instruments.

Question

Quizplus · Accepted Answer

Non-strategic investments are primarily made to earn returns on the invested funds rather than to control or influence the operations of the investee company. This contrasts with strategic investments, which are made to establish or maintain a business relationship or to exert influence over the investee company. Preferred shares and common shares are equity instruments, not debt instruments, and strategic investments can be either short-term or long-term, depending on the strategic goals of the investing entity.

Which of the Following Is the Most Accurate