When a Corporation Fails,the Maximum That Can Be Lost by an Investor

question 2

Multiple Choice

When a corporation fails,the maximum that can be lost by an investor protected by limited liability is:

• A) the amount of the initial investment.
• B) the amount of the profit on the investment.
• C) the amount necessary to pay the corporation's debts.
• D) the amount of the investor's personal wealth.

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Definitions:

Polynomial

A mathematical expression involving a sum of powers in one or more variables multiplied by coefficients.

Perfect Square Trinomial

A trinomial that can be factored into two identical binomials, resulting from squaring a binomial.

Simple Interest

A way of calculating interest where the amount earned or paid is proportional to the initial sum invested or borrowed and the rate of interest.

Principal

The original sum of money borrowed in a loan or put into an investment, not including profits or interest.