The Partnership Form of an Organization

question 19

Multiple Choice

The partnership form of an organization

• A) avoids the double taxation of earnings and dividends found in the corporate form of organization.
• B) usually provides limited liability to the partners.
• C) has unlimited life.
• D) simplifies decision making.

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Definitions:

Floating-rate Bonds

Bonds whose interest rate payments adjust periodically based on an underlying benchmark, making them less sensitive to interest rate changes.

Interest Rate Swap

A financial derivative contract in which two parties exchange interest rate payments on a specified principal amount.

LIBOR

The London Interbank Offered Rate, an interest rate average calculated from estimates submitted by the leading banks in London and used as a reference for lending rates worldwide.

Notional Principal

The term refers to the principal amount, or face value, upon which interest payments or financial derivatives are calculated, without the need for physical exchange of the principal sum.