Which of the Following Is NOT a Reason Why an Investor

question 84

Multiple Choice

Which of the following is NOT a reason why an investor would choose to invest in new and growing firms as a limited partner in a venture capital firm rather than making those investments directly by themselves?

• A) Venture capital firms use their control of the companies they invest in to protect those investments.
• B) The investments of venture capital firm are more diversified than the investments of a single individual.
• C) A venture capital firm generally has a wide range of expertise among its general partners.
• D) The investor will have a direct say in how the companies that the venture capital firm funds will be run.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its expected useful life, reflecting its consumption, wear and tear, or obsolescence.

Accumulated Depreciation

The total amount of an asset's cost that has been allocated as depreciation expense over its useful life, reducing its book value on the balance sheet.

Asset

Tangible or intangible items of value owned or controlled by a person or company, capable of producing future economic benefits.