SIE Exam Question 234: Answer and Explanation

Question: 234

One of the more attractive features of common stock is that:

• A. The stockholders have the right to choose Officers
• B. The stockholders have the right to vote on quarterly dividends
• C. One cannot lose more than one's investment
• D. Any of the above

Correct Answer: C

Explanation:

C: You cannot lose more than you've put at risk. A common stockholder cannot be held liable for any debts of the corporation, therefore they have limited liability.