James Was a Partner in a Large Firm

question 33

Multiple Choice

James was a partner in a large firm.He died unexpectedly.His son,Frank,wanted to take over for his father in the partnership and was well qualified to do the work his father had done.Which statement best describes Frank's rights in the partnership if he inherits the interest?

• A) Frank has a right to take over for his father in the partnership.
• B) Frank is entitled to the value in the partnership, but not to become a full partner.
• C) Frank has no rights to his father's partnership interest.
• D) None of the above.

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Definitions:

Rate Of Return

The rise or fall in an investment's value over a set period, shown as a percentage of the investment's initial expense.

Annual Dividend

The total amount of dividend that is paid by a company to its shareholders annually, typically represented as a sum of money for each share held.

Market Rate

The prevailing interest rate available in the marketplace on investments, loans, and deposits, reflecting the current cost of borrowing or the return on investment.

Required Return

The minimum annual percentage yield that an investor expects or requires from an investment.