The Choice of Ownership Form for Pooled Equity Investments Can

question 1

Multiple Choice

The choice of ownership form for pooled equity investments can also depend on the desire to avoid personal liability. Which of the following ownership structures suffers from the major disadvantage of unlimited liability for all investors?

• A) C Corporation
• B) Subchapter S Corporation
• C) General Partnership
• D) Limited Partnership

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Definitions:

Dominant Strategy

In a strategic interaction (game) between two or more players, a course of action (strategy) that a player will wish to undertake no matter what the other players choose to do.

Formal Agreements

Legally binding contracts or treaties between parties that outline specific obligations and rights.

Less Elastic

Describes a situation where demand or supply is relatively unresponsive to changes in price.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, income, employment, and trade.