Question

1) Identify the correct statement A. Both primary markets and secondary markets are examples of private...

1) Identify the correct statement

A. Both primary markets and secondary markets are examples of private markets

B. A primary market is where securities are traded

C. The Toronto Stock Exchange is an example of a secondary market

D. The Initial Public Offering market is an example of a secondary market

2) Which of the following is not an advantage of a sole proprietorship?

A. Limited liability

B. Inexpensive to form

C. Income is subject to proprietor's personal income

D. Subject to few government regulations

3) Which is the following statements is true about a general partner?

A. A general partner is found in a corporation - also known as a shareholder

B. A general partner has limited liability, like a limited partner

C. A general partner takes care of the day to day functioning of the company

D. A general partner and a limited partner have equal control over the company

4) The difference between the total market value of the firm and the total amount of investor supplied capital is known as ___

A. market value added

B. net income

C. profit

D. economic value added

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Homework Answers

Answer #1

1) C. The Toronto Stock Exchange is an example of a secondary market.

A primary market is where the stock is first offered to the public by the company. In the secondary market, shares are traded on the exchange and the company is not involved.

2) A. Limited liability

A sole proprietor does not enjoy limited liability. He has unlimited liability and he is not considered different from the business.

3) C. A general partner takes care of the day to day functioning of the company.

A general partner is responsible to maintain the day to day activities and carries unlimited liability.

4) A. Market value added

The difference between the total market value of the firm and the total amount of investor supplied capital is called the MVA.

Do let me know in the comment section in case of any doubt.

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