Which of the Following Is Not an Advantage of a Partnership

question 19

Multiple Choice

Which of the following is not an advantage of a partnership (relative to a sole proprietorship)

• A) inexpensive to set up
• B) makes financing easier
• C) benefits from diverse management talents
• D) limited liability

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Definitions:

Well-Diversified Portfolio

An investment portfolio that spreads risk and opportunity across a wide range of assets and sectors, aiming to reduce the impact of any single investment's poor performance.

Diversifiable Risk

A type of investment risk that can be reduced through diversification, relating to factors affecting specific industries, companies, or securities rather than the market as a whole.

Publicly Traded Stocks

Stocks of companies that are traded on public stock exchanges, making them available to buy and sell by investors.

True Market Portfolio

An optimal portfolio that includes all available assets in the market, their proportions reflecting their market values, as suggested by the Capital Asset Pricing Model.