Which of the following is NOT true regarding the misappropriation theory of insider
trading?
a. If a trader discloses to a source of nonpublic information that he or she plans to trade
on the basis of that information, there is no violation under the misappropriation theory.
b. Liability under the misappropriation theory requires deception.
c. The misappropriation theory widens the class of persons who can be found liable for
insider trading.
d. The trader cannot be held liable unless he or she is an insider of the company whose
securities are traded.
Answer:
Even if an individual is an at-will employee, in most states the employer is prohibited
from discharging the employee for a reason that violates public policy.
a. True
b. False
Answer:
The materiality of a misstatement or omission under Rule 10b-5 is judged at the time:
a. the statement is made.
b. of the stock purchase.
c. of the injury.
d. of the lawsuit.
Answer:
The Delaware Corporation Code allows the certificate of incorporation to include a
provision limiting or eliminating the personal liability of directors to the corporation or
to its shareholders for monetary damages for breach of the duty of loyalty.
a. True
b. False
Answer:
The UCC treats fixtures as goods.
a. True
b. False
Answer:
Assuming that more than one forum has jurisdiction over a lawsuit, the doctrine of
__________ involves a determination of which forum is more appropriate.
a. jurisdiction non conveniens
b. convenient state proceeding
c. forum non conveniens
d. subject matter jurisdiction
Answer:
A __________ placed on a product indicates that the product has met the certifier’s
standards of safety or quality.
a. certification mark
b. trademark
c. service mark
d. trade name
Answer:
Under theFTC’s __________, “all or virtually all” of theproduct must be made in the
fifty states, the District ofColumbia, or the U.S. territories and possessions.
a. Made in USA policy
b. Made within USA policy
c. Wood Products Labeling Act
d. Labeling Preemption Act
Answer:
__________ occurs when a raider acquires stock in a target company and then threatens
to comhence a hostile takeover unless the stock is repurchased by the target at a
premium over the market price.
a. Revlon mode
b. The Van Gorkom test
c. The Unocal Proportionality test
d. Greenmail
Answer:
An S corporation cannot have more than one class of stock.
a. True
b. False
Answer:
An agent may bind the principal due to the agent’s __________ authority.
a. express
b. implied
c. apparent
d. express, implied, or apparent
Answer:
A ‘spoliation inference” means that documents not properly introduced into court are
damaging to the party who could not produce them.
a. True
b. False
Answer:
Some countries require employers to fund employee benefits that are not expected in
the U.S.
a. True
b. False
Answer:
Assuming Rule 504 of Regulation D otherwise applies, it exempts offerings of up to
__________ within a __________ period, and there may be __________ purchasers.
a. $2 million; six-month; up to 100
b. $500,000; two-year; up to 500
c. $1 million; twelve-month; an unlimited number of
d. $100,000; three-month; up to 50
Answer:
Ethics and law are unrelated.
a. True
b. False
Answer:
When the U.S. Supreme Court decides to hear a case, it issues a __________ ordering
the lower court to certify the record of proceedings below and send it to the Supreme
Court.
a. commandment
b. writ of order
c. writ of certiorari
d. writ of expo facto
Answer:
In CASE 4.3, Fisher v. University of Texas at Austin (2013),the U.S. Supreme Court
held that:
a. when race is involved, a university admission test must be analyzed under the
Fourteenth Amendment’s Equal Protection clauses using a strict scrutiny test.
b. when gender is involved, a university admission test must be analyzed under the
Fourteenth Amendment’s Equal Protection clause using a rational basis test.
c. a university admission test must be analyzed under theFifth Amendment’s rational
basis test.
d. when gender is involved, a university admission test must be analyzed under the
Fourteenth Amendment’s Equal Protection clause using the substantially-related test.
Answer:
“National Treatment” prohibits WTO members from discriminating against imported
products in favor of “like products” produced domestically.
a. True
b. False
Answer:
Under federal law, individuals under the age _____ have no protection from
discrimination based on age.
a. 40
b. 50
c. 55
d. 60
Answer:
The Uniform Computer Information Transactions Act is a federal law.
a. True
b. False
Answer:
The term “appraisal rights” when used in regard to a corporate merger refers to the right
of dissenting shareholders to have corporate property independently appraised.
a. True
b. False
Answer:
The process in which existing common law positions are restated and laid down in a
statute is referred to as:
a. conciliation.
b. codification.
c. directive encoding.
d. sectioning.
Answer:
The __________ has the primary responsibility for regulating the packaging and
labeling of commodities other than food, drugs, medical devices, and cosmetics.
a. Federal Commerce Commission
b. Federal Interstate Regulating Commission
c. Federal Trade Commission
d. Uniform Commodity Commission
Answer:
If a used car is sold without a warranty, the label must state that the car is being sold “as
is.”
a. True
b. False
Answer:
ABC Company manufactures a contraption meant to enable a rider to fly behind a ski
boat. After a few months, ABC begins to hear of injuries when riders crash into water or
boats. In hopes of escaping liability, the president of ABC Company decides to
discontinue business and sell all assets to XYZ Company. The president of XYZ
Company is excited to purchase the assets at a bargain price and help ABC avoid
liability based upon the assertion of the president of ABC that XYZ cannot legally be
held liable for the flying accidents. Which of the following is true in a majority of states
applying the traditional successor liability rule?
a. XYZ Company will not be held liable for the accidents so long as there is no
contractual agreement by which it agrees to accept liability.
b. XYZ Company will only be held liable if it continues to manufacture the same
product lines as ABC.
c. XYZ Company will only be held liable if it keeps the same tax number as ABC
Company.
d. XYZ Company will likely be held liable for the accidents based upon the transaction
being entered into wrongfully in order for ABC Company to escape successor liability.
Answer:
Richard is starting a new security service. He tells his attorney, Kiera, that while he
plans to prohibit all acts of discrimination and harassment, he cannot be all places at all
times. Richard asks Kiera if there is anything he can do to limit his liability. What
should she tell him?
a. She should tell him that he has nothing to worry about because as long as he has a
rule prohibiting harassment, he cannot be held liable for acts of supervisors.
b. She should tell him that there is nothing he can do because under the law, he is
automatically liable for any acts of harassment committed by supervisors.
c. She should tell him that he should have a policy provided to all employees offering to
correct any offensive conduct, and that an unreasonable failure by an employee to take
advantage of corrective opportunities offered through the policy would help him avoid
liability.
d. She should tell him that he should take advantage of a loophole in Title VII that
allows business owners to opt out of the harassment provisions of Title VII.
Answer:
A majority of the federal courts of appeals have struck down claims for hostile work
environment in so-called paramour cases where coworkers have claimed that an
employee has received preferential treatment by a supervisor has a result of having
sexual relations with the supervisor.
a. True
b. False
Answer:
The European Union’s center of operations is in Brussels, Belgium.
a. True
b. False
Answer:
Patented or copyrighted products may confer market power on the owner in tying cases
when there are high switching costs.
a. True
b. False
Answer:
With a(n)__________ distributorship, a manufacturer limits itself to a single distributor
in a given territory.
a. dual
b. exclusive
c. franchise
d. market-power
Answer:
Which of the following is NOT considered a traditional shelf offering?
a. Securities offered pursuant to employee benefit plans
b. Securities offered pursuant to dividend reinvestment plans
c. Securities issued to alter voting rights for shareholders
d. Securities issued in connection with business combination transactions
Answer:
In theHolcomb v. Iona College case referenced in the text,a white assistant coach of a
college basketball team alleged he was fired because he was married to an African
American woman, and sued the college for violation of Title VII. How did the court
rule?
a. The court ruled that Title VII was inapplicable to such claims.
b. The court ruled that Title VII was inapplicable because a private college, as opposed
to a public college, was involved.
c. The court ruled that Title VII protects the parties involved in a racially mixed
marriage, but that in other situations, such as dating relationships, Title VII would not
apply.
d. The court ruled that Title VII protects employees from discrimination based on their
association with a person of a different race.
Answer:
Administrative agencies are usually part of the legislative branch.
a. True
b. False
Answer:
The tort of negligence does not include the element of:
a. duty.
b. causation.
c. fault.
d. intent.
Answer:
The Truth-in-Lending Act limits credit card liability to $50 per card for unauthorized
charges made before a card issuer is notified of a lost or stolen card.
a. True
b. False
Answer:
How would a plaintiff establish the existence of a tying arrangement, and under what
laws may tying arrangements be challenged?
Answer:
Set forth the two principal federal acts that regulate securities transactions and issuers.
Additionally, list the three beliefs federal securities laws embody as set forth in the text.
Do you believe that the securities rules that are in place are sufficient to protect
investors? Why or why not? Discuss fully.
Answer:
What is required in a filing for a voluntary petition in bankruptcy? An involuntary
petition?
Answer:
Carl is a contractor that is building a home for Orel. Pam is one of Orel’s neighbors.
One day Pam was walking in the neighborhood. As she passed the construction site, a
piece of lumber fell from the partially finished garage roof and hit her in the head,
injuring her severely. The lumber was left negligently on the roof by Carl. Pam now
wishes to sue Orel. Should Orel be held liable to Pam? Discuss.
Answer:
Set forth the five events referenced in the text that usually constitute events of default.
Answer:
List the seven elements of a Rule 10b-5 cause of action.
Answer:
John has just learned that the latest issue of The Blurb, the local school newspaper, has
referred to him as a “liar, cheat, and a lousy student.” In fact, John is only a lousy
student; he is a very honest person. Explain in detail what theory John can use to
recover damages from The Blurb. What defenses are available to the newspaper?
Answer:
Describe in detail the three basic types of deeds including any warranties or guarantees
the deeds provide.
Answer:
Define and explain the purpose of the business judgment rule. Under what
circumstances would the rule apply? When would the protection not apply? Discuss
fully.
Answer:
McBurger has just developed a new method of preparing its products that greatly
reduces the fat content and other medical problems associated with fast food. Although
still in the developmental phase, McBurger has been very careful not to release any
information regarding the process. The information is constantly under lock and key.
Jerry, a competitor’s employee, took a public tour of McBurger University to evaluate
going to work for McBurger. While on the tour, he accidentally saw the process being
conducted in a small laboratory that was visible to everyone, but not part of the tour.
Jerry realized that probably no one else would recognize the process, and said nothing.
Jerry was able to duplicate McBurger’s process, and is now about to be promoted to
vice-president of his company. Does McBurger have a claim against Jerry and his
employer? What is the likely outcome? Discuss fully.
Answer:
Federal courts are generally referred to as courts of limited jurisdiction. Over what three
types of cases do federal district courts have jurisdiction?
Answer:
What types of price-fixing agreements are considered horizontal price-fixing?
Answer:
Drug Company X has a prescription drug that will make people look younger and lose
weight. The problem is that it causes significant stomach problems. Ann, an executive
of Drug Company X, wants to advertise the drug’s benefits on television and radio but
leave out the stomach problems. Her secretary, Bob, tells her that she could run into
problems, and that he is not sure the drug can even be advertised. Ann disagrees stating
that it is up to physicians to warn patients of possible complications. She tells Bob that
she will not provide any information regarding contacting Company X so that no one at
Company X will be annoyed by receiving numerous inquiries about obtaining the drug’s
benefits. What would an FDA representative likely say in regard to Ann’s plan? Set
forth your response in detail.
Answer:
Set forth five of the nine factors used by the Department of Justice to decide whether to
indict a corporation.
Answer:
Specifically set forth what courts consider in order to determine whether there is a
hostile or abusive work environment.
Answer:
In relation to the obligation to provide business records and papers for a criminal
prosecution, discuss fully the Fifth Amendment protection for such business records
and papers in regard to corporations and also in regard to any custodian of such records.
Answer:
Discuss why Enron failed and who should be held responsible for the failure.
Answer: