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Free Questions › CFA › Corporate Issuers
Free CFA Corporate Issuers Practice Questions & Answers
900 exam-style Corporate Issuers questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 661
Which of the following is a reason governments create state-owned corporations?
Select an option first.
Correct answer: B — To increase transparency and accountability
Explanation: B is correct because state-owned corporations provide transparency to taxpayers. A is wrong because they do issue financial statements. C is wrong because they have boards and management. D is wrong because they still require financing.
Question 662
Which of the following is a feature of public company disclosure?
Select an option first.
Correct answer: B — Disclosure includes major changes in voting rights
Explanation: B is correct because public companies must disclose major voting-rights changes. A is wrong because annual reports often exceed 100 pages. C is wrong because qualitative information is also required. D is wrong because insider transactions must be disclosed.
Question 663
Which of the following is a characteristic of private companies?
Select an option first.
Correct answer: B — Limited number of shareholders
Explanation: B is correct because private companies often limit the number of owners. A is wrong because liquidity is low. C is wrong because listing is not required. D is wrong because liability is limited.
Question 664
Which of the following is a key reason emerging economies have more public companies?
Select an option first.
Correct answer: B — Transition to open markets
Explanation: B is correct because emerging economies open markets and attract foreign capital, increasing public listings. A is wrong because growth rates are rising. C is wrong because foreign investment increases. D is wrong because access to capital expands.
Question 665
Which of the following is a characteristic of going-private transactions?
Select an option first.
Correct answer: C — Investors often use debt to finance the acquisition
Explanation: C is correct because go-private deals often use debt financing. A is wrong because investors pay a premium. B is wrong because shares are delisted. D is wrong because companies may go public again.
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Question 666
Which of the following is a feature of public companies?
Select an option first.
Correct answer: B — Ability to raise capital from the general public
Explanation: B is correct because public companies can sell shares to the public. A is wrong because insider trades must be disclosed. C is wrong because liability is limited. D is wrong because corporations require boards.
Question 667
Which of the following is a feature of limited liability?
Select an option first.
Correct answer: B — Owners can lose only what they invested
Explanation: B is correct because limited liability caps losses at the investment amount. A is wrong because owners are not responsible for debts. C is wrong because guarantees are optional. D is wrong because ownership does not require management.
Question 668
Which of the following is a characteristic of the financial balance sheet?
Select an option first.
Correct answer: B — Shows assets and financing sources
Explanation: B is correct because the financial balance sheet shows assets and sources of financing. A is wrong because intangible assets are part of the economic balance sheet. C is wrong because liabilities are included. D is wrong because profit is shown on the income statement.
Question 669
Which of the following is a characteristic of corporations that helps them attract institutional investors?
Select an option first.
Correct answer: B — Standardized securities
Explanation: B is correct because standardized securities make investment easier. A is wrong because liability is limited. C is wrong because reporting is extensive. D is wrong because ownership transfer is unrestricted.
Question 670
Which of the following is a feature of equity investors?
Select an option first.
Correct answer: B — Ownership rights
Explanation: B is correct because equity investors own part of the company. A is wrong because returns are not guaranteed. C is wrong because interest applies to debt. D is wrong because debt has priority.
Question 671
Which of the following is a characteristic of private company liquidity?
Select an option first.
Correct answer: B — Low liquidity
Explanation: B is correct because private company shares are difficult to sell due to transfer restrictions and the absence of a public market. A is wrong because high liquidity applies to public companies, not private ones. C is wrong because liquidity is never guaranteed in private markets. D is wrong because private companies have significantly lower liquidity than public companies.
Question 672
Which of the following best explains why public companies have greater price transparency?
Select an option first.
Correct answer: B — Their shares are traded on regulated exchanges
Explanation: B is correct because exchanges provide real-time pricing and transparent trading rules. A is wrong because private trading lacks transparency. C is wrong because public companies must disclose financial information. D is wrong because public shares can be traded frequently.
Question 673
Which of the following is a key feature of limited liability partnerships (LLPs)?
Select an option first.
Correct answer: B — All partners have limited liability
Explanation: B is correct because LLPs eliminate the need for a general partner and give all partners limited liability. A is wrong because LLPs do not require a GP. C is wrong because LLPs are often restricted to professional firms. D is wrong because LLPs do not issue public shares.
Question 674
Which of the following is a reason corporations can raise more capital than partnerships?
Select an option first.
Correct answer: B — They can issue standardized securities
Explanation: B is correct because corporations issue standardized shares and bonds that appeal to a wide investor base. A is wrong because corporations have limited liability. C is wrong because ownership stakes do not need to be equal. D is wrong because corporations face more regulatory oversight.
Question 675
Which of the following is a feature of public company ownership transfer?
Select an option first.
Correct answer: B — Transfers occur freely on exchanges
Explanation: B is correct because public shares trade freely on exchanges. A is wrong because board approval is not required for public share transfers. C is wrong because that applies to partnerships. D is wrong because unanimous approval is not required.
Question 676
Which of the following is a characteristic of limited partnerships?
Select an option first.
Correct answer: B — LPs have limited liability
Explanation: B is correct because LPs’ liability is capped at their investment. A is wrong because only GPs manage the business. C is wrong because GPs have unlimited liability. D is wrong because LPs typically do not manage.
Question 677
Which of the following is a characteristic of public company reporting?
Select an option first.
Correct answer: B — Reporting includes audited financial statements
Explanation: B is correct because public companies must file audited financial statements. A is wrong because reporting is mandatory. C is wrong because reporting is quarterly or semiannual. D is wrong because insider transactions must be disclosed.
Question 678
Which of the following is a feature of private limited companies?
Select an option first.
Correct answer: B — Limited liability for owners
Explanation: B is correct because private limited companies provide limited liability. A is wrong because shares are not freely tradeable. C is wrong because many jurisdictions cap the number of owners. D is wrong because private companies do not list shares.
Question 679
Which of the following is a reason general partnerships are risky?
Select an option first.
Correct answer: B — Partners have unlimited liability
Explanation: B is correct because partners are personally liable for all business debts. A is wrong because liability is not limited. C is wrong because profits are shared. D is wrong because partnerships can hire employees.
Question 680
Which of the following is a characteristic of corporations that helps attract passive investors?
Select an option first.
Correct answer: B — Separation of ownership and management
Explanation: B is correct because investors can own shares without managing the business. A is wrong because shareholders do not manage operations. C is wrong because liability is limited. D is wrong because corporations have boards.
Question 681
Which of the following is a characteristic of public companies?
Select an option first.
Correct answer: B — They must disclose material events
Explanation: B is correct because public companies must disclose material events that affect security prices. A is wrong because public companies can raise debt. C is wrong because liability is limited. D is wrong because issuing equity is a core feature.
Question 682
Which of the following is a feature of public exchanges?
Select an option first.
Correct answer: B — Transparent pricing
Explanation: B is correct because exchanges provide transparent pricing. A is wrong because exchanges are rules-based. C is wrong because exchanges are open to all investors. D is wrong because exchanges are secondary markets.
Question 683
Which of the following is a reason corporations can attract global investors?
Select an option first.
Correct answer: B — Standardized securities and disclosures
Explanation: B is correct because standardized securities and disclosures make investment easier. A is wrong because liability is limited. C is wrong because reporting is extensive. D is wrong because ownership transfer is unrestricted.
Question 684
Which of the following is a reason public companies may go private?
Select an option first.
Correct answer: B — To reduce public scrutiny
Explanation: B is correct because going private reduces scrutiny and reporting requirements. A is wrong because regulatory burden decreases. C is wrong because liquidity decreases. D is wrong because free float disappears.
Question 685
Which of the following is a characteristic of corporations that helps them grow?
Select an option first.
Correct answer: B — Ability to raise capital from many investors
Explanation: B is correct because corporations can raise capital from a broad investor base. A is wrong because access to financing is extensive. C is wrong because liability is limited. D is wrong because separation exists.
Question 686
Which of the following is a feature of public company shares?
Select an option first.
Correct answer: B — Freely tradeable
Explanation: B is correct because public shares trade freely on exchanges. A is wrong because public shares are liquid. C is wrong because anyone can buy public shares. D is wrong because board approval is not required.
Question 687
Which of the following is a characteristic of private placements?
Select an option first.
Correct answer: B — Limited investor eligibility
Explanation: B is correct because private placements target accredited investors. A is wrong because liquidity is low. C is wrong because disclosure is limited. D is wrong because private placements are not exchange-traded.
Question 688
Which of the following is a feature of limited partnerships?
Select an option first.
Correct answer: B — GPs have unlimited liability
Explanation: B is correct because GPs bear unlimited liability. A is wrong because LPs typically do not manage. C is wrong because LPs have limited liability. D is wrong because GPs do not have limited liability.
Question 689
Which of the following is a feature of private companies?
Select an option first.
Correct answer: B — Limited disclosure
Explanation: B is correct because private companies disclose far less than public companies. A is wrong because shares are not freely tradeable. C is wrong because liability is limited. D is wrong because listing is not required.
Question 690
Which of the following is a characteristic of public company free float?
Select an option first.
Correct answer: B — Shares available for public trading
Explanation: B is correct because free float refers to shares available for public trading. A is wrong because insider shares are excluded. C is wrong because free float shares can be traded. D is wrong because free float is not limited to governments.
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Equity390
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Specialized Pathway - Portfolio Management253
Derivatives and Risk Management131
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