Question

7. Two analysts are overheard discussing technical trading rules. One says, "I have noticed over the last year or so that the market rises to about 11,000 and then falls back. It seems to do that every two to three months. At the bottom, it goes to about 10,000 and then rebounds. It's sort of like watching a roller coaster." The market consistently staying in a band between 10,000 and 11,000 is most
likely to be used as evidence against which form of market efficiency?
a. Weak-form efficient.
b. Semi-strong form efficient.
c. Strong-form efficient.

1. What is double taxation?
a. It is when two separate tax authorities tax the same corporation.
b. It is a situation that only affects sole proprietorships.
c. It occurs when the business owner pays himself or herself a salary.
d. It occurs when earnings are taxed once at the corporate level and then taxed a second time as personal income.

2. Which statement is true?
a. LLCs cannot have earnings pass through as personal income.
b. LLCs are ideal for joint ventures.
c. S-type corporations can be partially owned by other corporations
d. LLCs can only be owned by people and not other corporations.

3. Which of the following statements is CORRECT?
a. One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
b. Sole proprietorships are subject to more regulations than corporations.
c. In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
d. Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
e. Corporations of all types are subject to the corporate income tax.

4. Which of the following statements is CORRECT?
a. It is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.
b. Corporations face fewer regulations than sole proprietorships.
c. One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.
d. One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.
e. If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

Answer 1

Answer 1) answer is (a), since the stock is following a trend that means even technical theory works, which only works in weak form of market.

Answer 2) option (b)

Llc has no limits on number of members, which makes it ideal for joint venture.

Answer 3) option (d) corporation has tax on income and taxes on dividend paid while partnership and sole proprietorship have to pay only income tax.

Answer 4) option (d) corporation comes with limited liability features that is beneficial for equity investors while in partnership they don't always have this feature.