With Respect to a Corporation, Select the Statement That Is

question 91

Multiple Choice

With respect to a corporation, select the statement that is false:

• A) A corporation cannot sue others or be sued.
• B) Ownership rights to the corporation are transferable.
• C) Its organization requires an approved charter which is governed by state law.
• D) A corporation is a separate legal entity from its owners.

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Definitions:

Adverse Selection

A situation in which one party in a transaction has more or better information than the other, leading to an imbalance that can result in market inefficiency or failure.

Insurance Premium

The amount of money an individual or organization pays for an insurance policy, providing coverage against specific risks over a defined period.

Expected Loss

a calculation used in finance and insurance to estimate the average financial loss or cost associated with an investment or insurance policy over a period.

Adverse Selection

A situation in which one party in a transaction has more information than the other, leading to an imbalance and potentially poor market outcomes, commonly seen in insurance markets.