Firm X and Firm Z become cross-shareholders, which means that they:
A)Participate in co-marketing.
B)Share in a turnkey project.
C) Engage in a market transaction.
D) Invest as strategic investors in each other.

Question

Firm X and Firm Z become cross-shareholders, which means that they:
A)​Participate in co-marketing.
B)​Share in a turnkey project.
C) ​Engage in a market transaction.
D) ​Invest as strategic investors in each other.

Quizplus · Accepted Answer

Cross-shareholding refers to the situation where two companies own shares in each other. In this case, Firm X and Firm Z become strategic investors in each other, hence the correct answer is D. Co-marketing (A) refers to when two companies jointly market a product, share in a turnkey project (B) refers to when two companies combine their resources to complete a specific project, and engaging in a market transaction (C) refers to a basic business transaction and does not have anything to do with cross-shareholding.

Firm X and Firm Z Become Cross-Shareholders, Which Means That