Stella,Bob,and Chris Are Partners in Sole Services,a General Partnership That

question 28

Multiple Choice

Stella,Bob,and Chris are partners in Sole Services,a general partnership that runs a small shoe store.Stella and Bob want to buy the building that they are currently renting,but Chris does not agree.How will this disagreement be resolved?

• A) Sole Services will buy the building because this management decision can be made by a majority vote of the partners.
• B) Sole Services will buy the building because one partner can never stand in the way of the will of the majority of partners.
• C) Sole Services will not buy the building because this decision requires a unanimous vote of the partners.
• D) Sole Services will not buy the building because all partnership management decisions require a unanimous vote of the partners.

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Definitions:

Adverse Selection

A situation in which asymmetric information leads to a selection of undesirable outcomes, such as in insurance markets.

Moral Hazard

The situation where one party is more likely to take risks because the consequences of those risks will be felt by another party.

Uninsured

Individuals or entities lacking insurance coverage, exposing them to potential financial loss from unforeseen events or health issues.

Relatively Healthy

Describes a condition or state of being that is generally good or beneficial, especially in comparison to other similar circumstances or metrics.