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The expected return on a portfolio:
I. can never exceed the expected return of the best performing security in the portfolio.
II. must be equal to or greater than the expected return of the worst performing security in the portfolio.
III. is independent of the unsystematic risks of the individual securities held in the portfolio.
IV. is independent of the allocation of the portfolio amongst individual securities.
Income-Sharing Ratio
The predetermined method by which profits or losses are divided among participants in a joint venture or partnership.
Limited Liability Partnership
Limited Liability Partnership (LLP) is a partnership in which some or all partners have limited liabilities, protecting their personal assets from the partnership's debts.
Limited Liability Company
An organizational model that merges the direct tax benefits of a partnership or sole proprietorship with the corporation's advantage of limited liability.
General Partnership
A business structure where two or more partners share unlimited liability for the company's debts and obligations.
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