Stock Market Principles and Investor Protections Quiz
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Questions and Answers

What provides Josie with limited liability as an investor in the stock market?

  • Limited liability for investors (correct)
  • Legal personality
  • Transferability of investor ownership
  • Separation of legal ownership and management control

    • What is true about shareholders in a public stock company?

  • They are appointed by a board of directors to oversee the company’s management
  • They directly supervise and coordinate the manufacture of products and delivery of services
  • They are the centerpiece of corporate governance
  • They are granted a charter of incorporation by the state and legally own company stock (correct)

    • What allows investors to freely buy and sell their ownership stakes in a company?

  • Separation of legal ownership and management control
  • Limited liability for investors
  • Transferability of investor ownership (correct)
  • Legal personality

    • What ensures that the company's management control is distinct from the legal ownership of the company?

    <p>Separation of legal ownership and management control</p> Signup and view all the answers

    What is an advantage for Josie in terms of investing in the stock market?

    <p>Limited liability for investors</p> Signup and view all the answers

    What is true of shareholders in a public stock company?

    <p>They are granted a charter of incorporation by the state and legally own company stock</p> Signup and view all the answers

    What legal protection might reassure Josie about investing in the stock market?

    <p>Corporate veil</p> Signup and view all the answers

    What is a key aspect of corporate governance in a public stock company?

    <p>Board of directors oversight</p> Signup and view all the answers

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