Final answer:
The corporations with many shareholders and traded securities on organized markets are 'publicly held corporations.' This type of corporation allows for widespread share ownership and facilitates capital raising by offering stock to the public. The correct answer is option 3) PubLiCly held
Step-by-step explanation:
Corporations can be categorized into different types based on their ownership and how their securities are traded. The corporations that have a large number of shareholders and whose securities are traded on organized securities markets are known as publicly held corporations. This means the correct answer to the student's question is 3) Publicly held.
Publicly held corporations issue stocks that are available for public purchase, allowing them to raise capital from a larger pool of investors. Buying stock in such a corporation entails becoming one of the many shareholders who have limited liability for the company's debts, but also share in its potential profits and losses. Moreover, since the stock of these corporations is traded publicly, typically on stock exchanges, there is a fluid market for these shares, providing liquidity for investors.
Private corporations, in contrast, have a smaller number of shareholders and do not offer their stock to the general public. Because of this, their shares are not traded on public stock exchanges. Other corporation types include nonprofit corporations, which are organized for public or social benefit rather than profit, and professional corporations, which are formed by professionals like lawyers or doctors and offer services within their expertise.