In Finance, a "diversified" business model can be created via merger & acquisition with the...

70.2K

Verified Solution

Question

Finance

In Finance, a "diversified" business model can be created via merger & acquisition with the express purpose of reducing risk (as measured by standard deviation of financial returns). However, actual results may create outcomes that increase rather than decrease risk. Please explain or clarify why this occurs despite the fact that an Excel model projects very favorable outcomes. Include a real world example to support your answers.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students