For public policy reasons, governments will on occasion invest in outside entities. When the investment represents less than a control position, it is a(n)________________ (unless there is shared control that constitutes a government partnership).
A)loan receivable
B)portfolio investment
C)forgivable loan
D)appropriation.

Question

Quizplus · Accepted Answer

When a government invests in an outside entity but does not own a controlling interest, it is considered a portfolio investment. This is a common practice for governments to promote economic growth and development in certain areas or industries. A loan receivable would imply that the investment is a debt owed by the outside entity to the government, which may not always be the case. A forgivable loan implies that the investment will be forgiven at some point in the future, which may not be the intention of the government. Appropriation refers to the act of allocating funds for a specific purpose, but does not necessarily involve investing in outside entities.

For Public Policy Reasons, Governments Will on Occasion Invest in Outside