The Most Effective Form of Business Organization for Raising Capital

question 144

Multiple Choice

The most effective form of business organization for raising capital is the

• A) joint venture.
• B) syndicate.
• C) sole proprietorship.
• D) partnership.
• E) corporation.

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Definitions:

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specified period.

Writer

In the context of options, the writer is the seller who grants the right to the buyer in exchange for a premium, assuming the risk that the asset may have to be delivered under the contract terms.

Premium

The amount by which the price of something, such as a security or insurance policy, exceeds its face value or principal.

European Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price on a specified date.