Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment. If the company goes bankrupt, what is the most Medford could lose?
A) half of his investment
B) the par value of his stock
C) $600
D) $600 plus foreclosure costs

Question

Quizplus · Accepted Answer

The most Medford could lose is his entire investment of $600. In the event of bankruptcy, the value of the stock could drop to zero, resulting in a loss of the entire investment.

Aaron Medford Has Invested $600 in the Corporate Stock of a Manufacturer