Which of the Following Statements Is CORRECT

question 61

Multiple Choice

Which of the following statements is CORRECT?

• A) One drawback of forming a corporation is that it generally subjects the firm to additional regulations.
• B) One drawback of forming a corporation is that it subjects the firm's investors to increased personal liabilities.
• C) One drawback of forming a corporation is that it makes it more difficult for the firm to raise capital.
• D) One advantage of forming a corporation is that it subjects the firm's investors to fewer taxes.
• E) One disadvantage of forming a corporation is that it is more difficult for the firm's investors to transfer their ownership interests.

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Definitions:

Hunting Stand

A structure used by hunters to elevate themselves above the ground to improve visibility and shooting range on their prey.

Diversification

Practice of reducing risk by allocating resources to a variety of activities whose outcomes are not closely related.

Risk-Free Asset

An investment that is expected to return its original value without any loss and with a certain rate of interest.

Positively Correlated

A relationship between two variables where both variables move in the same direction, meaning that as one variable increases, the other also increases, and vice versa.