Which of the Following Statements Generally Cannot Be Correct for an Investor

question 67

Multiple Choice

Which of the following statements generally cannot be correct for an investor who faces unlimited liability on an investment?

• A)the investor owns stock in the firm.
• B)the investor has no partners.
• C)the investor is subject to double taxation.
• D)the investor is responsible for managing the firm.

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Definitions:

Unsecured Claim

A claim or debt in bankruptcy for which the creditor does not have an interest in the debtor's property as collateral for the debt.

Reorganization

A process aimed at restructuring a company's financial and operational aspects to facilitate recovery from distress.

Confirmed

Verified or ratified; often used in legal and financial contexts to indicate that an action or transaction has been officially approved.

Feasibility

The state or level of being easily or conveniently done, or the practicality of a proposed plan or method.