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Part I Multiple Choice Questions (3.5' 10 = 35') (C) 1. Which of the following statements generally cannot be correct for an investor who faces

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Part I Multiple Choice Questions (3.5' 10 = 35') (C) 1. Which of the following statements generally cannot be correct for an investor who faces unlimited liability on an investment? A. The investor owns stock in the firm. B. The investor has no partners. C. The investor is subject to double taxation. D. The investor is responsible for managing the firm. (A) 2. When the management of a business is conducted by individuals other than the owners, the business is more likely to be a: A. Corporation. B. Sole proprietorship. C. Partnership. D. General partner. (A) 3. A common problem for closely held corporations is: A. Lack of access to substantial amounts of capital. B. That shareholders receive only one vote each. C. The separation of ownership and management. D. An abundance of agency problems. (A) 4. is not considered capital market securities. A. Repurchase agreements B. Municipal bonds C. Corporate bonds. D. Equity securities E. Mortgages institutions, while pension funds are classified as (A) 5. Credit unions are classified as contractual savings financial institutions. A. Deposit-type B. Contractual savings C. Federal agency D. Mutual fund

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