Which of the Following Is a Disadvantage of the Company

question 29

Multiple Choice

Which of the following is a disadvantage of the company form of business?

• A) It has an unlimited life.
• B) It must comply with the Corporations Act 2001 and other legislation.
• C) Its shareholders have limited liability for debts incurred by the business.
• D) It has the ability to raise large amounts of capital.

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Definitions:

Beta

A rephrased measure indicating the relative risk or volatility of a security or portfolio in comparison to the broader market.

Sharpe Measure

A metric that evaluates the risk-adjusted return of an investment by comparing its excess return (over risk-free rate) to its standard deviation of returns.

Residual Standard Deviation

A measure of the amount of variance in a dataset or model that is not explained by the predictive variables or the model itself, often used in regression analysis.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility.