Traci and Sally Have Considered Starting Their Own Business but Are

question 1

Multiple Choice

Traci and Sally have considered starting their own business but are concerned about the possibility of losing their personal assets if the business fails.One way for Traci and Sally to avoid this risk would be to organize their company as a ________.

• A) general partnership
• B) limited partnership
• C) corporation
• D) sole proprietorship
• E) merger

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Definitions:

Sell

The act of transferring ownership of a product or service from one party to another in exchange for money or other compensation.

Option Contract

A contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price on or before a particular date.

Option Premium

The price paid for the right to buy or sell an underlying financial instrument at a specified strike price until the option expires.

Underlying Asset

An asset that determines the value of a financial derivative, such as options or futures.