Which Item Is an Advantage of Stock? I

question 37

Multiple Choice

Which item is an advantage of stock? I. reduction of risk for the owners of the company
II) increased welfare for investors who buy the stocks

• A) I only
• B) II only
• C) both I and II
• D) neither I nor II

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Definitions:

Joint Ventures

A business arrangement between two or more parties who agree to combine resources for the purpose of accomplishing a specific task or project.

Share Profits

The distribution of a portion of a company's earnings to its shareholders as determined by the board of directors.

Share Losses

In investing, refers to the apportioning of financial losses among shareholders or partners in proportion to their ownership or interest in the enterprise.

Manufacturing Arrangement

A type of franchise in which the franchisor provides the franchisee with a formula or ingredient that is necessary to manufacture a product.