Which of the Following Is Not a Characteristic of the Corporate

question 79

Multiple Choice

Which of the following is not a characteristic of the corporate form of organization?

• A) The owners of a corporation cannot lose more than the amount of their investment.
• B) Shares in a corporation are more readily transferable than is an interest in a partnership.
• C) Shareholders have authority to decide by majority vote the amount of dividends to be paid.
• D) The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production.

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Definitions:

Treynor Measure

A performance metric that measures the returns earned in excess of that which could have been earned on a riskless investment per each unit of market risk.

Standard Deviation

A measure of the dispersion or variability in a set of values, used to assess the risk associated with a particular security or investment portfolio.

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 indicates the stock is more volatile than the market, while a beta below 1 indicates the stock is less volatile.

Nonlinear Factor Exposures

Nonlinear Factor Exposures refer to investment sensitivities to market factors that do not change in a straight-line (linear) relationship with the market's movements.