Series 7 Exam Question 398: Answer and Explanation

Question: 398

All of the following are true regarding limited partners EXCEPT

• A. They have access to unlimited financial information regarding the partnership.
• B. They may participate in management decisions because limited partners have a tremendous amount of risk.
• C. They may vote to terminate a partnership.
• D. They may invest in competing partnerships.

Correct Answer: B

Explanation:

B. Limited partners have access to all the financial information regarding the partnership, they may vote to terminate the partnership, and they may invest in competing partnerships. However, limited partners may not make management decisions; that right is limited to the general partner(s).