Limited Partners Are Similar to Corporate Shareholders in That

question 254

Multiple Choice

Limited partners are similar to corporate shareholders in that:

• A) both have unlimited liability
• B) there is no liability for either
• C) both are liable to the extent of their investment
• D) there must be one general partner
• E) none of the other choices

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Definitions:

Market Interest Rate

The rate at which interest is paid by borrowers for borrowing funds in the market.

Compounded Annually

A method of calculating interest in which the interest earned each year is added to the principal, so that the balance doesn't merely grow, it grows at an increasing rate.

Present Value

The present value of a future amount of money or sequence of cash flows, based on a certain rate of return.

Notes Payable

Short or long-term financial obligations evidenced by promissory notes, requiring the borrower to repay the principal amount along with any accrued interest.