fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
C) General partnership.
D) Limited partnership.
E) Unlimited liability company.
112) Which one of the following is a disadvantage of a partnership?
A) Double taxation.
B) Ability to raise capital as compared to a sole proprietorship.
C) Growth limitations due to the inability to raise investment capital.
D) The debt obligations of a limited partner.
E) Complexity and cost of partnership formation.
113) Which statement best describes hedge funds:
A) Hedge funds are largely unregulated and privately managed investment funds catering to sophisticated investors, which look to earn high returns using aggressive financial strategies prohibited by mutual funds.
B) Hedge funds are highly regulated and publicly managed investment funds catering to novice investors, which look to earn average returns using simple financial strategies similar to mutual funds.
C) Hedge funds are regulated and publicly managed investment funds catering to sophisticated investors, which look to earn high returns using aggressive financial strategies prohibited by mutual funds.
D) Hedge funds are largely unregulated and privately managed investment funds catering to sophisticated investors, which look to earn high returns using aggressive financial strategies similar to mutual funds.
E) Hedge funds are secondary market sources of raising capital for startup companies.
114) Which of the following statements is false concerning limited partnerships?
A) Limited partners are responsible for all debts of the partnership.
B) Limited partners generally do not manage the partnership.
C) In a limited partnership, all partners share is limited to the amount contributed to the partnership.
D) Limited partnerships can bring in more partners.
E) Limited partnerships have limited liability (to the extent of their investment).
115) Which one of the following statements concerning a partnership is true?
A) Under a general partnership, only the key partner is personally liable for the business debts.
B) Limited partners in a limited partnership should be actively involved in management decisions.
C) Income from a limited partnership is taxed as corporate income.
D) A primary advantage of a partnership is the ease of transferring ownership.
E) A partnership terminates at the death of any partner.
116) A sole proprietorship is best defined as a business owned by:
A) A single individual who has limited liability for the firm's debts.
B) A single individual who has unlimited liability for the firm's debts.
C) Individuals who enjoy limited liability.
D) One or more individuals who have agreed to accept unlimited liability for the firm.
E) An individual for less than ten years.