Peason IGCSE Business - 1.2.2 Characteristics of Size

Which concept refers to the possibility of loss or failure in a business venture?

• a) Risk
• b) Ownership
• c) Limited liability
• d) Public ownership

Answer explanation

Risk refers to the possibility of loss or failure in a business venture.

Which concept limits the financial liability of the owners of a business to the amount of money they have invested in the business?

• a) Risk
• b) Ownership
• c) Limited liability
• d) Public ownership

Answer explanation

Limited liability limits the financial liability of the owners of a business to the amount of money they have invested in the business, thereby protecting their personal assets from business debts.

What type of corporation has its shares freely traded on a stock exchange?

• a) Private corporation
• b) Sole trader
• c) Public corporation
• d) Partnership

Answer explanation

A public corporation has its shares freely traded on a stock exchange.

What are the reasons in favour of public ownership of corporations?

• a) Limited liability
• b) Increased control
• c) Reduced scrutiny
• d) Access to more capital

Answer explanation

Reasons in favour of public ownership of corporations include access to more capital through the sale of shares, which can be used for expansion or investment in new projects.

What are the reasons against public ownership of corporations?

• a) Reduced scrutiny
• b) Increased control
• c) Limited liability
• d) Loss of control

Answer explanation

Reasons against public ownership of corporations include the loss of control as more shareholders have a say in decision-making, which may not always align with the interests of the company's management or other shareholders.

Which concept refers to the individuals or groups that have an interest, claim, or stake in the business, such as employees, customers, suppliers, and the community?

• a) Ownership
• b) Control
• c) Stakeholders
• d) Shareholders

Answer explanation

Stakeholders refer to the individuals or groups that have an interest, claim, or stake in the business, such as employees, customers, suppliers, and the community.

Which concept refers to the individuals or institutions that own shares in a corporation and therefore have a financial interest in its performance?

• a) Ownership
• b) Control
• c) Stakeholders
• d) Shareholders

Answer explanation

Shareholders are the individuals or institutions that own shares in a corporation and therefore have a financial interest in its performance.

Which concept refers to the ability of individuals or groups to exert influence or control over a business?

• a) Ownership
• b) Control
• c) Stakeholders
• d) Shareholders

Answer explanation

Control refers to the ability of individuals or groups to exert influence or control over a business.

Which concept refers to the sources from which a business obtains the money it needs to start up, operate, and expand?

• a) Ownership
• b) Control
• c) Sources of finance
• d) Use of profits

Answer explanation

Sources of finance refer to the sources from which a business obtains the money it needs to start up, operate, and expand.

What are the reasons in favour of private ownership of corporations?

• a) Increased control
• b) Reduced scrutiny
• c) Limited liability
• d) Loss of control

Answer explanation

Reasons in favour of private ownership of corporations include increased control over decision-making and operations, as there are fewer shareholders with a say in company matters.