Investors who go through a capital formation process can expect:
A. the amount of capital they control to increase: During capital formation, investors typically raise additional funds through various means such as issuing new shares, borrowing, or attracting new investors. This process can lead to an increase in the total capital available to the investor, thereby expanding the amount of capital they control.
C. a decrease in the diversity of their capital investments: Contrary to the options listed, undergoing a capital formation process does not necessarily lead to a decrease in the diversity of capital investments. In fact, investors may use the additional capital raised to diversify their investment portfolio further, spreading risk across different asset classes or industries.
D. their capital to be used to fund high-risk investments: When investors raise capital through a formation process, they have the flexibility to allocate these funds based on their risk tolerance and investment strategy. While some investors may choose to invest in high-risk ventures, others may opt for more conservative investment opportunities. The use of capital in high-risk investments is a decision made by the investor and is not a guaranteed outcome of the capital formation process.
