Which statement(s) is/are FALSE about master limited partnerships (MLPs)?

I. MLPs trade publicly on exchanges.
II. MLPs are pass-through entities like REITs.
III. MLPs generally keep most keep cash flows due to significant capital requirements of infrastructure projects.

Correct Answer: A

A master limited partnership is a business venture that exists in the form of a publicly traded limited partnership. They combine the tax benefits of a private partnership - profits are taxed only when investors receive distributions - with the liquidity of a publicly traded company. MLPs generally distribute most cash flows (III is false).