Which statement about a limited partner's liability is correct?

In the context of limited partnerships, the correct statement is that limited partners are liable only to the extent of their contribution. This means that if a limited partner invests a certain amount of money into the partnership, their financial liability for the debts and obligations of the business is capped at that amount. They are not personally responsible for the partnership's debts beyond their initial investment.

This structure is designed to encourage investment in partnerships while providing a measure of protection to limited partners. They enjoy limited liability, which allows them to invest without risking their personal assets beyond what they have contributed to the partnership.

The other statements present incorrect interpretations of a limited partner's liability. Unlimited liability, for instance, means that partners could be held personally responsible for all debts, which does not apply to limited partners who specifically benefit from limited liability. While limited partners may risk their investment, they are not insulated from losing their money, as they can still lose their contribution if the venture fails.