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      Question

      If a bank enters the insurance market by launching its

      own insurance subsidiary, it is practicing:
      A Market penetration Correct Answer Incorrect Answer
      B Line extension Correct Answer Incorrect Answer
      C Diversification Correct Answer Incorrect Answer
      D Harvesting Correct Answer Incorrect Answer
      E Market development Correct Answer Incorrect Answer

      Solution

      Diversification means entering a new product category, possibly a new market, beyond core business.  Why Other Options Are Incorrect • A: Increasing share in same market. • B: Variant within same category. • D: Profit extraction stage. • E: Same product in new market.  Banking Example: Bank launching general insurance arm.

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