A Disadvantage of Using Friends and Relatives as Investors Is

question 17

Multiple Choice

A disadvantage of using friends and relatives as investors is:

• A)they tend to demand more stock options.
• B)familial seniority often conflicts with the "chain of command."
• C)they require more leniency with benefits and pay.
• D)unrealistic expectations or misunderstood risks destroy friendships or family relationships.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold, determined by the supply and demand dynamics in the open market.

Common Stock

Shares of ownership in a corporation that entitle the shareholder to vote on corporate matters and receive dividends, subject to the company's profitability.

Short-term Speculation

The practice of buying and selling assets with the intention of making quick profits from short-term fluctuations in price.

Owned Percentage

The proportion of a property or business owned by an individual or entity, typically represented as a percentage.