What does it mean to "divest"?

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Prepare for the WISE Economics and Personal Finance Test. Use flashcards and engage with multiple choice questions, complete with hints and explanations. Be exam-ready with comprehensive study tools!

Divesting refers to the process of selling off assets or investments, often for financial or ethical reasons. This action can occur when an individual or organization wants to reduce their financial exposure or liquidate investments that are no longer aligned with their values or strategic goals. For example, an investor might divest from companies involved in fossil fuels due to environmental concerns or sell stocks that are underperforming financially.

The choice that implies acquiring new investments aggressively, increasing investment in a particular asset, or holding investments for long-term gains does not capture the essence of divesting. Each of these options suggests a focus on expanding or maintaining investments rather than the act of selling them. Hence, the correct understanding of divesting as selling off assets distinguishes it from these alternative investment strategies.

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