Which of the following is NOT required for an investor to have control over an investee?
A) The investor must have power over the investee.
B) The investor must have exposure to variable returns from the investment.
C) The investor must be able to use its power to affect the amount of its returns.
D) The investor must currently own a majority of the voting shares of the investee.

Question

Quizplus · Accepted Answer

While owning a majority of the voting shares of an investee can be one way to have control over the investee, it is not the only way. The other three options (power over the investee, exposure to variable returns, ability to affect returns) are all necessary for control. So D is the answer because having a majority of voting shares is not the only requirement for control.

Which of the Following Is NOT Required for an Investor