Which of the following best expresses the policy behind the Truth-in-Lending Act?
a. To help borrowers by requiring lenders to charge a “reasonable” rate of interest as
determined by the Federal
Reserve Board.
b. To help small business by prohibiting lenders from using, as collateral for secured
loans, a business’s most important assets.
c. To help debtors for loans for personal, family, household or agricultural purposes to
be armed with the necessary information on a loan to better bargain for credit and to
choose the creditor with the best terms.
d. To help lenders by permitting them to investigate a person’s credit history without
having to worry about state libel laws.
If Barker Co. buys 51% of the shares of Carter Co.:
a. Carter Co.’s board would have to approve the sale.
b. Barker Co.’s board would have to approve the sale.
c. Both boards would have to approve the sale.
d. Both sets of shareholders would have to approve the sale.
A member of a limited liability company has a property interest in the property owned
by the LLC.
a. True
b. False
In all substituted contracts there must be an agreement among three parties where a new
promise is substituted for an existing promise or a new promisor is substituted for an
existing promisor.
a. True
b. False
The Magnuson-Moss Warranty Act was enacted to protect purchasers of consumer
goods.
a. True
b. False
The Fourth Amendment to the Constitution:
a. requires a speedy trial.
b. prohibits double jeopardy.
c. protects against unreasonable search and seizure.
d. All of these.
A court may dissolve a corporation in a proceeding by a shareholder if it has established
that:
a. the directors are deadlocked in the management of the corporate affairs.
b. the acts of the directors or those in control of the corporation are illegal, oppressive,
or fraudulent.
c. the shareholders are deadlocked and have failed to elect directors for at least two
consecutive annual meetings.
d. All of these.
After investigating a violation, an administrative agency must always use formal
procedures to resolve the matter.
a. True
b. False
The combination of two or more corporations’ total assets, title to which is vested in one
of them, which is known as the surviving corporation, is a:
a. dissolution.
b. liquidation.
c. consolidation.
d. merger.
E-Sign provides consumers must:
a. evidence their consent on paper to conducting transactions with electronic records
after being informed of the types of hardware and software required.
b. receive a “clear and conspicuous” statement informing them of their right to
withdraw consent to receivingelectronic records.
c. receive a “clear and conspicuous” statement informing them of their right to have the
record provided only inelectronic form.
d. All of these.
Which of the following determines when to declare dividends and in what amount?
a. The stockholders
b. The officers of the corporation
c. The board of directors
d. The state in which the corporation was chartered
Upon the seller’s breach, the buyer must protect himself by obtaining “cover” or he is
barred from any other remedy under the Code.
a. True
b. False
A director who is a member of the board that declares an illegal dividend is not
personally liable to the company for the amount that is illegal.
a. True
b. False
The Revised Model Business Corporation Act would permit the directors to avoid a
shareholder vote for which of the following amendments to the articles of
incorporation?
a. Changing the name from Oskcamp Brown Corporation to McDuddy Corporation
b. A change from duration of 99 years to perpetual life
c. Authorizing a new class of stock
d. Adding to the number of directors
Yukino pays $500 toward the purchase of a boat from Tyler. Although their agreement
for the sale of the boat for$2,200 is oral, courts agree that her part payment and its
acceptance by Tyler make the contract enforceable.
a. True
b. False
In order for advertising to be found deceptive by the FTC, it is necessary that:
a. the advertisement can only be reasonably interpreted in one way, and in that way, it is
misleading.
b. there is a misrepresentation, omission, or practice that is likely to mislead the
consumer acting reasonably in the circumstances, to the consumer’s detriment.
c. the sellers have malice or evil intent.
d. something affirmative was said which was misleading; i.e., an omission cannot be
deceptive.
The Clayton Act regulates all but which of the following?
a. Price discrimination
b. Tying contracts and mergers
c. Exclusive dealing by labor organizations
d. Interlocking directorates
Prices can be controlled through direct price fixing or by market allocation.
a. True
b. False
One way of keeping a trade secret is to obtain a patent on it.
a. True
b. False
Businesses which wish to safeguard their technology while doing business in the
international sector would not want to consider the use of wholly owned subsidiaries.
a. True
b. False
All states have at least one federal judicial district and some, more populous states have
more than one.
a. True
b. False
In many states, dissolution that is nonjudicial may be brought about when:
a. all the shareholders agree to dissolve, even without action by the board.
b. the board of directors agrees to dissolve.
c. the creditors petition the court.
d. the business of the corporation becomes obsolete.
Which of the following would most probably be considered a valid offer?
a. “Would you like to buy this?”
b. “I’d give $50 for a cold glass of water.”
c. “Special sale on DVRs today – $200 each.”
d. “$100 reward for return of lost white-gold, men’s wedding band inscribed with
initials ‘TEA’ to Tony Adams,350 Main Street, Peoria.”
A defense to an action based on untrue statements contained in a registration statement
is:
a. innocent mistake.
b. due diligence.
c. constructive disclosure.
d. reasonable diligence.
If a person dies intestate, his property will be:
a. distributed according to the clear intention of the decedent if ascertainable.
b. passed to his living children.
c. kept by the state.
d. Not necessarily any of these.
A trust:
a. is a fiduciary relationship in which one person holds both legal and equitable title to
property which is the subject matter of the trust.
b. may take effect only during the lifetime of the person creating the trust.
c. may be created by such words as “I leave [certain property] to Swigert in full
confidence and hope that
Swigert will care for Adamson.”
d. may not be created “to benefit and maintain Southside Park,” since this purpose
would be too vague to be enforceable.
Because of the , the contractual promise of a surety to the creditor must be in writing to
be enforceable.
a. main purpose doctrine
b. Uniform Commercial Code
c. Bankruptcy Act
d. statute of frauds
In corporations, the managers are necessarily owners.
a. True
b. False
IBM has two manufacturing facilities-one in New York City and one in Evergreen,
Oklahoma. Marjorie has worked in the Oklahoma plant for 15 years assembling
resistors. Her sister, Ellen, has worked at the same plant for 15 years also. Their brother,
Hank, has worked there for 10 years in the same job as his sisters. Ellen transfers to the
New York facility. Their salaries are now as follows:
Marjorie-$12.00 per hour Ellen-$19.50 per hour Hank-$14.00 per hour
Is there a violation of the Equal Pay Act?
a. Yes, because Ellen’s pay is higher than Marjorie’s.
b. Yes, because Ellen and Hank’s pay is higher than Marjorie’s.
c. Yes, because Hank’s pay is higher than Marjorie’s.
d. No, since they are different people with different personalities.
A blind person will be held to the standard of care of a reasonable blind person rather
than that of the reasonable sighted person for purposes of determining negligence.
a. True
b. False
The requirement of legally sufficient consideration:
a. is that the parties have agreed to an exchange and it imposed a legal detriment upon
the promisee or conferred a legal benefit upon the promisor.
b. has nothing to do with the legal value of what is exchanged.
c. means the subject matter that the parties agree to exchange has to have the same
value.
d. is the same as the requirement of adequacy of consideration.
In relation to damages, the test of foreseeability is subjective.
a. True
b. False
The UCC provides rules, where the parties do not set forth terms in their contract, to
cover:
a. terms of payment.
b. place of delivery.
c. particulars of performance.
d. All of these.
Under the UPA, in order to avoid liability, only constructive notice of a dissolution is
required to be given to third parties who had no knowledge of the partnership before its
dissolution.
a. True
b. False
A composition of creditors is a bankruptcy form of relief under Chapter 13 of the
Bankruptcy Code.
a. True
b. False