Question

Explain the following terms.

Proprietorship, partnership, corporation, charter, and bylaws Limited Partnership, limited liability partnership, and professional corporation

Stockholder wealth maximize market, and capital market maximization

Money market, capital market, primary market, and secondary market

Private market, public market, and derivatives Investment bank: financial services corporation, and financial intermediary

Mutual fund, and money market fund

Physical location exchange, computer/telephone network

Open outcry auction and dealer market automated trading platform

Production opportunities and time preferences for consumption

Foreign trade deficit

Answer 1

As per rules I am answering the first 4 sub parts of this question

1.Proprietorship: A proprietorship is a business which is run by single owner known as the sole proprietor. He makes the decisions and runs the business single handedly. He also bears all the losses and reaps all the profots of the business. Sole proprietor has unlimited liability which means that his personal assets can be used to pay off the debts of the organisation.

A partnership is a business which is done by two or more people. They pulling their resources and hence a partnership enjoy is higher capital than a sole proprietorship. The partners fix the terms between them by creating a partnership deed and share the profits and losses of the business.

Corporation is the highest form of business organisation. Shares of the business are given out to multiple people who are the owners of the corporation. The main feature of a corporation is that it is a separate legal entity and there is a separation of the management from the owners. The owners have limited liability and profits are not guaranteed to be distributed to the owners. The management decides whether the dividend is to be distributed to the owners are retained for growth of the business.

Charter and by laws limited partnership: This represents the dedd which fixes the terms between the partners. The profit sharing ratio, the means of distribution and the terms for admission and retirement of partners are established by this document. The charter also lays out the details of partners with limited liability and those with unlimited liability.