Why Would the Owners of a Successful Business Operation Carry

question 38

Multiple Choice

Why would the owners of a successful business operation carry life insurance on the lives of its shareholders?

• A) to ensure that the business doesn't suffer financial loss from business interruption
• B) to offset any deficiency in the value demanded for the deceased's shares
• C) to offset the challenging costs of buying out a deceased shareholder's shares
• D) to comply with the law's mandatory life insurance pertaining to shareholders

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Definitions:

Antitrust Laws

Laws designed to promote competition and prevent monopolies, thereby protecting consumers from unfair business practices and ensuring a variety of goods and services in the market.

Sherman Act

A foundational antitrust law in the United States that outlaws monopolistic practices and promotes competitive markets.

Clayton Act

A U.S. legislation enacted in 1914 aimed at promoting competition among businesses by prohibiting certain practices that would lead to antitrust issues.

Herfindahl Index

A measure of the concentration and competitiveness of an industry; calculated as the sum of the squared percentage market shares of the individual firms in the industry.