It Is True That a Private Company

question 18

Multiple Choice

It is true that a private company:

• A) is not restricted with a maximum number of shareholders.
• B) can raise funds from the public.
• C) must have 'Proprietary' or 'Pty' as part of its name.
• D) can only have shareholders that are family members.

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Definitions:

Unsystematic Risk

Risk associated with a specific company or industry, which can be mitigated through diversification.

Market Risk

The possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets.

Diversifiable Risks

Risks that can be reduced or eliminated from a portfolio through diversification.

Unique Risks

Unique risks refer to the specific and individual risks that affect only a particular company, security, or investment sector, as opposed to risks that affect the entire market.