Why Do Investors Require Entrepreneurs to Put in a Lot

question 5

Multiple Choice

Why do investors require entrepreneurs to put in a lot of their own capital?

• A) Entrepreneurs know more about the venture opportunity than the investor.
• B) Their capital serves as an incentive to be careful with the investor's capital.
• C) It is useful for reducing venture finance problems.
• D) All of the above.
• E) None of the above.

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Definitions:

Investment Newsletter

A publication that provides advice and analysis on investment opportunities, market trends, and financial strategies.

Consecutive Years

A period of time consisting of sequential years immediately following one another without interruption.

Predicting

The action or process of making forecasts about future events or outcomes based on current or historical data.

Weak Form

The hypothesis that past stock prices and trading volume do not affect future stock prices, suggesting that technical analysis cannot predict future movements.