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Perfection by investment of collateral is one of the methods of perfecting a security
interest under the Uniform Commercial Code (UCC).
The infancy doctrine gives adults the right to disaffirm contracts they have entered into
with minors.
An accredited investor is defined as a person who does not understand the risks
involved in securities investment and will suffer considerable financial damage if the
investment fails.
Only an established company is permitted to sell new securities to the public.
If the defendant's act caused the plaintiff's injuries, there is causation in fact.
The power of eminent domain allows the government to take private property for public
use after paying just compensation.
The United States follows the principle of restricted immunity for suits against foreign
nations.
A person who has dealt with an insane person need not place that insane person in
status quo if the contract is either void or voided by the insane person.
There are no specific governmental laws endorsing the moral minimum of social
responsibility for corporations.
A bridge is an example of real property.
Accountants can be named as defendants in lawsuits that assert violations of the
Racketeer Influenced and Corrupt Organizations Act (RICO).
The agent's actionsnot the principal'screate an apparent agency.
A reply is a document filed by the original plaintiff in response to the defendant's
cross-complaint.
Any property, money, or other benefit received by the agent in the course of an agency
belongs to the principal.
Federal antitrust laws provide only for government lawsuits.
If a person owns real property in fee simple, his or her ownership has no limitation on
inheritability.
In case a corporation's assets are liquidated, the preferred stockholders are paid before
common stockholders.
The Securities Act of 1933 regulates the issuance and sale of securities online.
Ordinary negligence by an accountant is not a violation of Section 10(b) and Rule
10b-5 of the Securities Exchange Act of 1934.
During the review of a registration statement, the SEC does not pass judgment on the
merits of the securities offered.
An LLC is not liable for any injury caused by an LLC member while acting within the
ordinary course of business of the LLC.
The bylaws of a corporation must be filed with a government official.
The reasonable person standard is a test used to determine whether a tort is intentional
or unintentional.
Extortion of public officials is called extortion under color of official right.
To certify a union, more than 50 percent of the employees must vote for establishing the
union.
A competitor can lawfully discover a trade secret by performing reverse engineering.
Secret profits obtained by a director or officer cannot be recovered by a corporation.
The FDA labels ordinary household soap as a cosmetic product.
If a member or manager of an LLC is found to be a tortfeasor, he or she is not
personally liable for the injury or death of another person.
In the United States, the first person to invent an item or a process is given patent
protection over a later inventor who was first to file a patent application.
The income or losses of an LLC flow through to the members' individual income tax
returns; this avoids double-taxation.
The euro can be used in all countries of the eurozone.
The duty of care requires corporate directors and officers to use care and diligence
when acting on behalf of the corporation.
The principle of inconsistency of Kantian ethics postulates treating all ethical cases
differently.
The relevant product or service market generally includes substitute products or
services that are reasonably interchangeable with the defendant's products or services.
A member of a manager-managed LLC who is not a manager owes no fiduciary duty of
loyalty or care to the LLC or its other members.
Labor unions use the approach of individual bargaining with employers to obtain better
working conditions.
The right to withhold delivery is available to the seller if the buyer or lessee wrongfully
rejects or revokes acceptance of the goods.
Under partnership law, ________ have the right to manage the affairs of the limited
partnership.
A) investors
B) sole proprietors
C) limited partners
D) general partners
Harvey was at his college reunion where he noticed Raymond, his former roommate.
Harvey and Raymond did not get along well at the reunion. Offended by something
Raymond mentioned, Harvey punched him in the face and broke his jaw. Harvey is
liable for ________.
A) breach of duty of care
B) disparagement
C) battery
D) assault
A social responsibility theory of business according to which a corporation's duty is to
make a profit while avoiding causing harm to others is referred to as ________.
A) stakeholder interest
B) corporate citizenship
C) maximizing profits
D) moral minimum
A(n) ________refers to an agreement among members that governs the affairs and
business of the LLC and the relations among members, managers, and the LLC.
A) certificate of interest
B) franchise agreement
C) operating agreement
D) agreement of conversion
Martin, who owned a piece of land along with two other tenants, executed a will in
which he left all his property to his son. When Martin died, his son received his interest
in the shared property and became a tenant with the other two owners. What kind of
concurrent ownership would allow such a passage of title?
A) joint tenancy
B) tenancy in common
C) tenancy by the entirety
D) community property
In which of the following cases do federal courts have exclusive jurisdiction?
A) cases involving sales and lease contracts
B) federal question cases
C) suits against the United States
D) diversity of citizenship cases
Mark and Jack work as clerks at the New Bank of North America. They plan to rob the
bank and manage to get its floor plans. They study the security arrangements and
movements of the security personnel of the bank. They even get weapons in case force
is required to rob the bank. The police, however, get information about the plan and
arrest Mark and Jack before the robbery occurs. Mark and Jack have committed which
of the following crimes?
A) criminal conspiracy
B) extortion
C) money laundering
D) larceny
Which of the following is an example of an autonomous agency of the United Nations
(UN)?
A) the North Atlantic Treaty Organization (NATO)
B) the Security Council
C) the World Trade Organization (WTO)
D) the International Monetary Fund (IMF)
Which of the following is true of Rule 10b-5?
A) Privity of contract is necessary for filing a lawsuit under this rule.
B) Civil lawsuits are not permitted under this rule.
C) Only purchasers and sellers of securities can sue under this rule.
D) Ordinary negligence is a violation of this rule.
Which of the following is true of an apparent agency?
A) The authority of an apparent agent is implied from the conduct of the parties.
B) The third-party is not bound to the contract created by an apparent agent.
C) The principal is bound to the contracts entered into by an apparent agent.
D) The actions of an apparent agent create an apparent agency.
Which of the following is true of a note?
A) It is a long-term unsecured debt instrument that is based on a corporation's general
credit standing.
B) It is a long-term debt security that is secured by some form of collateral.
C) It can be either unsecuredor secured.
D) It contains a conversion feature.
Kimberley, a merchant seller in Kansas, had an oral contract to sell goods to Jane, a
merchant buyer in Memphis, for $100,000. Two days after contracting, Kimberley
sends a sufficient written confirmation to Jane of the agreed-upon transaction. Jane,
who has reason to know the contents of the written confirmation, fails to immediately
object to the contents of the confirmation. Two weeks after receiving the written
confirmation, Jane receives delivery of the goods from Kimberley, and Jane then sends
an objection to the written confirmation to Kimberley. Which of the following is true of
the contract between Kimberley and Jane?
A) The Statute of Frauds can be raised against the contract because a letter of objection
was sent to the offeror.
B) The offer is valid as the offeree knew the contents of the confirmation and did not
object within 10 days.
C) The contract is void as the offeror did not receive a letter of confirmation from the
offeree for delivery.
D) The Statute of Frauds can be raised because the offeree did not sign the contract.
Which of the following is true of a limited partnership?
A) Other limited partnerships cannot become limited partners in an existing limited
partnership.
B) A limited partner is personally liable for the debts of the partnership.
C) Corporations are allowed to become partners in a limited partnership.
D) A limited partnership can have only one general partner but multiple limited
partners.
Which of the following best describes the scope of Title VII of the Civil Rights Act of
1964?
A) It applies to all employers irrespective of the number of employees.
B) It does not apply to labor unions.
C) It does not cover state and local governments.
D) It does not apply to Native American tribes.
The new line of fairness-enhancing products marketed by Radiance has allegedly been
developed using large-scale animal testing procedures. Insiders reveal that the high
levels of lead present in the cosmetics have proven to be fatal for many of the animals
used in the laboratories. Radiance is likely to be inspected for suspected criminal
violations of the ________.
A) Food, Drug, and Cosmetic Act
B) Consumer Product Safety Act
C) Health Care Reform Act
D) Federal Trade Commission Act
Which of the following is enacted under state police power?
A) personal property laws
B) intellectual property laws
C) international trade laws
D) equal opportunity laws
Air rights enable the owner of property to ________.
A) develop cultivated plant life on the land
B) drill into the earth to utilize groundwater for personal use
C) rent or sell the space above the property for commercial purposes
D) create fixtures that become a part of the real estate sales contract
Which of the following types of employment discrimination is carried out against a
person because of his or her heritage or cultural characteristics?
A) race discrimination
B) color discrimination
C) national origin discrimination
D) genetic information discrimination
A(n) ________ is a less serious crime, is not inherently evil but nevertheless prohibited
by society, and is punishable by fines or imprisonment for one year or less.
A) misdemeanor
B) indictable offence
C) felony
D) violation
The legality of nonprice vertical restraints of trade under Section 1 of the Sherman Act
is examined by applying the ________.
A) Colgate doctrine
B) Noerr doctrine
C) per se rule
D) rule of reason
A certain state in the United States declares that its citizens should only wear "modest"
clothing. Which of the following conclusions is made when this law is tested for
substantive due process?
A) unconstitutional for compulsion
B) invalid for violation of the Equal Protection Clause
C) void for vagueness
D) invalid for violating freedom of expression
A collection of criminal statutes is referred to as a ________.
A) bill
B) constitution
C) penal code
D) charter
Which of the following is true of antitrust laws?
A) Antitrust laws are fixed and unchangeable.
B) Private parties cannot intervene in public antitrust actions brought by the
government.
C) Federal antitrust laws provide for government lawsuits and exclude private lawsuits
from their purview.
D) Treble damages cannot be sought in antitrust lawsuits.
Which of the following statements best describes re-direct examination?
A) The plaintiff's attorney questions the witness who was questioned by the defendant's
attorney
B) The plaintiff's attorney questions the witness before he or she is questioned by the
defendant's attorney.
C) The defendant's attorney questions the witness who was questioned by the plaintiff's
attorney.
D) The defendant's attorney questions the witness before he or she is questioned by the
plaintiff's attorney.
In the United States, what recourse does an accused person have if he cannot afford a
private defense attorney?
A) He will have to spend his time in jail until he can collect enough money to afford
one.
B) A public defender will be appointed to the accused by the government for a nominal
fee.
C) He will have to defend himself when the trial starts.
D) The government will provide an attorney for the accused free of charge.
The ________ is a federal statute that primarily regulates the issuance of securities by
companies and other businesses.
A) Securities Act of 1933
B) Securities Exchange Act of 1934
C) Sarbanes-Oxley Act of 2002
D) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
________ is a restraint of trade in which a seller refuses to sell one product to a
customer unless the customer agrees to purchase a second product from the seller.
A) A tying arrangement
B) Predatory pricing
C) Price fixing
D) A group boycott
Kinetosphere Automation Inc. (K.A.) makes a mandatory employment contract with all
its employees. The contract states that K.A.'s employees are not permitted to work for
any other organization while they are employed by K.A. If K.A. finds an employee
serving another company, it can approach the court to obtain a(n) ________ to prevent
the employee from working in the other company.
A) restitution
B) rescission
C) injunction
D) subjugation
________ is the process whereby the judge and attorneys ask prospective jurors
questions to determine whether they would be biased in their decisions.
A) Consolidation
B) Trial of fact
C) Voir dire
D) Intervention
Which of the following best defines the term distributional interest?
A) the ratio in which profit is distributed among members of an LLC
B) the process of distributing profits or losses according to the capital investment of the
member
C) the constitution of management of the LLC based on the extent of each member's
financial investment
D) a member's ownership interest in an LLC that entitles the member to receive
distributions of money and property from the LLC
A tenancy created when a lease specifies intervals at which payments are due but does
not specify the duration of the lease is known as a ________.
A) tenancy at sufferance
B) life tenancy
C) periodic tenancy
D) tenancy at will
________ permits issuers to sell up to $50 million of securities to the public during a
12-month period, pursuant to a simplified registration process.
A) SEC Rule 506
B) Section 12 of the Securities Act of 1933
C) Section 5 of the Securities Act of 1934
D) Regulation A
A(n) ________ estateis an estate in which the owner has a present possessory interest in
the real property.
Based on his religion, an employee feels discriminated against by his employer. Who
must he approach before filing a lawsuit against the employer? Describe the process.
________ allows small companies to raise capital from many small-dollar investors
through Web-based platforms.
A(n) ________ is a contract in which the original offeree pays consideration (usually
money) in return for the original offeror giving consideration (time of the option
period).
A power of attorney where a principal confers powers on an agent to act in specified
matters on the principal's behalf is referred to as a(n) ________.
The ________ rule is applicable to restraints of trade considered inherently
anticompetitive. Once this determination is made about a restraint of trade, the court
will not permit any defenses or justifications to save it.
________ is liability without fault.
Give an account of the Noerr doctrine.
A contract between a corporation and a holder that contains the terms of a debt security
is known as a(n) ________.
A(n) ________ contract is a contract that has not been fully performed by either or both
sides.
Under the doctrine of ________, the transfer of the property is involuntary and does not
require the delivery of a deed.
The ________ Act is a federal statute, enacted in 1930, that prohibits price
discrimination.
The ________ Clause prevents the government from promoting one religion over the
other.
Stock that permits a corporation to buy back the preferred stock at some future date is
known as ________.
Many multinational corporations conduct business in another country by using a(n)
________.
