Which of the Following Is a Disadvantage of Partnership Firms

question 5

Multiple Choice

Which of the following is a disadvantage of partnership firms?

• A)These cannot be dissolved without the permission of SEC.
• B)These are taxed at multiple levels: corporate level and individual level.
• C)These have more difficulty in raising capital as compared to a sole proprietorship.
• D)These have a mutual agency which creates personal obligations for each partner.

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Definitions:

Capital Market History

The study of past changes and developments in capital markets, including trends in interest rates, stock prices, and financial instruments.

Potential Reward

The expected gain or benefit that may be obtained from an investment or action.

Risky Asset

An asset that carries a higher level of financial risk when compared to safer investments, often with the potential for higher returns.

Semi-Strong Efficiency

A form of market efficiency that asserts all public information is already reflected in stock prices, making it impossible to achieve consistently higher returns.