A Partner's Maximum Loss Absorbable Is Calculated By

question 16

Multiple Choice

A partner's maximum loss absorbable is calculated by:

• A)​Dividing the partners' capital balance by percent in interest
• B)​Multiplying distributable assets by partners profit sharing
• C)​Multiplying partners' capital by profit/loss ratio
• D)​Dividing partners' capital balance by profit/loss agreed ratio

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Definitions:

Variance

A statistical measure that represents the dispersion or spread of data points in a data set, indicating how far each number in the set is from the mean.

Standard Deviation

A measure of the dispersion or variability in a set of data points, indicating how much the values deviate from the mean.

Risk Averse Investor

An investor who prefers to minimize risks, opting for safer investments with lower returns instead of higher risk ones with potentially higher returns.

Expected Return

The weighted average of all possible returns from an investment, with the weights being the probabilities of each outcome.