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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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