Series 39 Practice Questions - Direct Participation Programs Principal Qualification Examination Exam

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Which statement best describes the liability of a limited partner in a typical direct participation program organized as a limited partnership?

The limited partner has unlimited liability for all partnership debts The limited partner is liable only up to the amount invested, absent participation in management The limited partner has no economic risk once tax deductions are claimed The limited partner guarantees all partnership borrowing by default

Correct Answer:

The limited partner is liable only up to the amount invested, absent participation in management

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