Question

Why is due diligence important for investors considering company fixed deposits?

a.

Due diligence is unnecessary for company fixed deposits.

b.

Due diligence helps in identifying the risks associated with company deposits.

c.

Due diligence is only required for bank fixed deposits.

d.

Due diligence is not applicable to fixed maturity plans.

Posted under IC 89 Management Accounting

Answer: (b).Due diligence helps in identifying the risks associated with company deposits. Explanation:Due diligence includes the analysis of past credentials of the company, its credit rating by credit rating agencies, and other factors to identify the risks associated with company deposits.

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