Identify the Correct Statement About an Arm's-Length Transaction

Multiple Choice

Identify the correct statement about an arm's-length transaction.

A) It is a transaction involving a party that is controlled by another entity and does not act on its own behalf.
B) It is a transaction made by parties as if they were unrelated,in a free market system,each acting in its own best interest.
C) It is a transactions in which one party sets aside independent interest so as to focus on the wishes of the controlling party.
D) An arm's-length transaction should involve at least one interested party that is concerned about the probable consequences of the transaction.
E) A transaction involving subsidiaries would not be considered an arm's-length transaction because the parties are acting independently.