How Does the Principle of Limited Liability Make a Corporation

question 66

Multiple Choice

How does the principle of limited liability make a corporation well suited to raising large amounts of capital?

• A) information is publically disclosed regarding a corporation's finances
• B) a corporation's investors are protected against limited losses
• C) a corporation is subject to greater outside scrutiny
• D) investors are protected against unlimited losses

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Definitions:

Scatterplot

A type of graph used in statistics to display values for typically two variables for a set of data, where each dot represents one observation.

Negative Correlation

A correlation between two variables where the growth of one inversely affects the decline of the other.

Statistical Significance

A measure indicating that the likelihood of the observed results occurring by chance is very low, typically used in hypothesis testing to validate study findings.

Observed Differences

Variations noted in the outcomes or characteristics of subjects within a study or experiment.