The Limited Liability Rule

question 35

Multiple Choice

The limited liability rule:

• A) exposes the investor to an unlimited risk.
• B) discourages the investors to invest in stocks.
• C) forces each shareholder to be responsible for the entire company's loss.
• D) limits the risks involved in investing in corporations.

---

Definitions:

Projection

A defense mechanism where individuals attribute their own unacceptable thoughts, feelings, or motives to another person.

Automobile Accident

A collision involving one or more vehicles on a roadway, often resulting in damage to the vehicles and potential injury to the occupants.

Defense Mechanism

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Repression

In psychoanalytic theory, the unconscious exclusion of painful impulses, desires, or fears from the conscious mind.