Which of the following could be considered an example of forced reinvestment if the blockage of funds was expected to be temporary?
A)Vertical reinvestment by an automobile manufacturer to buy parts suppliers and showrooms.
B)A lumber cutting company subsequently builds a paper mill with blocked funds.
C)Purchase of local money market instruments and short-term loans.
D)all of the above

Question

Quizplus · Accepted Answer

The purchase of local money market instruments and short-term loans could be considered an example of forced reinvestment if the blockage of funds was expected to be temporary because the company is investing in short-term options until the funds become available again. Options A and B are examples of vertical integration and unrelated diversification, respectively, and do not necessarily involve forced reinvestment due to temporary blockage of funds.

Which of the Following Could Be Considered an Example of Forced