To the extent that individual economies are ____ each other, net cash flows from a portfolio of subsidiaries should exhibit ____ variability, which may reduce the probability of bankruptcy.
A) dependent on; less
B) dependent on; more
C) independent of; less
D) independent of; more

Question

To the extent that individual economies are ____ each other, net cash flows from a portfolio of subsidiaries should exhibit ____ variability, which may reduce the probability of bankruptcy.​
A) ​dependent on; less
B) ​dependent on; more
C) ​independent of; less
D) ​independent of; more

Quizplus · Accepted Answer

When individual economies are independent of each other, net cash flows from a portfolio of subsidiaries are likely to exhibit less variability. This is because the diverse economic conditions can offset each other, leading to a more stable overall performance.

To the Extent That Individual Economies Are ____ Each Other