Question

The voyages at that time involved higher investments, huge risks of piracy and shipwreck and there was a large fluctuation in not only the..........Therefore, in Europe, even a

single voyage was preceded by formation of a company, which wasliquidated when the voyage was over and the shareholders shared the profits or losses as the case was.

Answer 1

In Europe at that time, trading voyages involved high investments, risks of piracy and shipwreck, and fluctuations in prices, profits, and losses. To mitigate these risks, joint-stock companies were formed where merchants could pool their funds and share the profits or losses from the voyage.

Step-by-step explanation:

In Europe, during the time of voyages, there were higher investments and great risks of piracy and shipwreck. There was also a large fluctuation in not only the price of the goods but also in the profits and losses. To mitigate these risks and share the financial burden, joint-stock companies were formed. These companies allowed merchants to pool their funds and invest in trading voyages. The profits or losses from the voyage were then shared among the shareholders. This system provided a way for individuals to invest in lucrative trading ventures without risking everything they owned.