Which of the following statements is true concerning variable interest entities (VIEs)? (1.) The role of the VIE equity investors can be fairly minor.
(2)) A VIE may be created specifically to benefit the business enterprise that established it with low-cost financing.
(3)) VIE governing agreements often limit activities and decision-making.
(4)) VIEs usually have a well-defined and limited business activity.
A) 2 and 4.
B) 2, 3, and 4.
C) 1, 2, and 4.
D) 1, 2, and 3.
E) 1, 2, 3, and 4.

Question

Quizplus · Accepted Answer

All the statements are true concerning variable interest entities (VIEs). VIE equity investors often have a minor role, VIEs can be created for low-cost financing, their governing agreements can limit activities and decision-making, and they usually have well-defined and limited business activities.

Which of the Following Statements Is True Concerning Variable Interest