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Investment companies must have a total net worth of at least:

A) $500,000
B) $1 million
C) $5 million
D) $10 million

User Valgog
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1 Answer

6 votes

Final answer:

The minimum net worth requirement for investment companies varies by specific laws and regulations and without that context, the question cannot be accurately answered. Net worth is calculated as total assets minus total liabilities, and maintaining a positive net worth is essential for financial health.

Step-by-step explanation:

The student's question relates to the regulatory financial requirements for investment companies. In the U.S., investment companies are often subject to certain net worth requirements as mandated by regulatory bodies. In this instance, without additional specific context, a definitive answer cannot be given since the minimum net worth requirement may vary based on different laws and regulations, such as those enforced by the Securities and Exchange Commission (SEC) or state laws. Moreover, the provided reference information does not clearly specify a correct answer to this question. Instead, detailed explanations regarding bank's net worth are given, which may indirectly indicate that investment companies also need to maintain a positive net worth, but a specific minimum figure is not provided.

The net worth of a bank, as explained in the reference information, is the total assets minus total liabilities. For example, Safe and Secure Bank has a net worth of $1 million, calculated as $11 million in assets minus $10 million in liabilities. Following this concept, we know that a positive net worth is essential for a bank's operation, and similarly, investment companies must maintain a certain level of net worth to be considered financially healthy. However, it is essential to consult the specific legal requirements for the correct minimum net worth requirement for investment companies.

User Ajonno
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