The Age Discrimination in Employment Act (ADEA) is enforced by the EEOC.
Answer:
Under which of the following conditions would a shareholder be liable to the
corporation or its creditors?
A. If he/she buys stock that was fully paid for when issued.
B. If he/she deals only with dividends and not shares.
C. If he/she is involved in “watered stock” situations.
D. If he/she was unaware of the illegality of the dividends.
If a person buys stock that was fully paid for when issued, he normally has no further
liability to the corporation or its creditors. However, a shareholder who did not pay the
full subscription price for newly issued shares is liable for the balance due. This would
include “watered stock” situations where property exchanged for shares is overvalued.
Answer:
(p. 425; 426) When an agent’s breach of duty causes harm to the principal:
A. the principal may deduct the loss from the amount due the agent.
B. the principal can bring an action in court even if compensation is due.
C. the principal is not liable to compensate the agent, even if the breach is serious
enough.
D. the principal is liable to show actual damages to avoid having to compensate.
Answer:
In the case of a taking, just compensation is defined as:
A. the fair market value of the property plus its sentimental value.
B. the current fair market value plus any expected future value from the taking.
C. the current fair market value of the property involved in the taking.
D. the fair market value of the property if it were to be sold to a developer.
Answer:
Registration by coordination:
A. allows the issuer to file the 1933 Act registration statement with the state securities
administrator.
B. is prohibited by both the 1933 and 1934 Acts.
C. increases the issuer’s expense of complying with state law when making an interstate
offering.
D. is concerned primarily with public distributions of securities.
Answer:
If an order instrument is transferred without indorsement:
A. the instrument has not been negotiated.
B. the transferee can qualify as a holder.
C. the transferee has the right to the qualified indorsement of the transferor.
D. the transferee has none of the rights of the transferor to enforce the instrument.
Answer:
Ted makes a deal with Ella to sell her his farm. They shake hands to ‘seal the deal,” but
do not put the agreement in writing. The contract is:
A. voidable but enforceable.
B. void.
C. valid.
D. unenforceable.
Answer:
If Susan found Tom’s backpack in Biblio Bookstore:
A. Susan would have the right to hold the mislaid property for Tom.
B. the bookstore would have the right to hold the mislaid property for Tom.
C. Susan would acquire possession and ownership of the backpack.
D. the bookstore would acquire possession and ownership of the backpack.
Answer:
The imposter rule regarding negotiable instruments:
A. was devised to put the responsibility for determining the TRUE identity of the payee
on the drawee of a check.
B. makes the payee’s signature valid even though it is a forgery.
C. does not force the maker to find the wrongdoer.
D. lays the responsibility of determining the identity of payee on latter holders of an
instrument.
Answer:
A partner who wrongfully dissociates:
A. loses the right to demand a dissolution.
B. can participate in the winding up process.
C. must not be paid the value of his interest for the breach, if the firm continues.
D. can ask the court to appoint a receiver on his behalf.
Answer:
Alice purchased a new computer from Compu-Best, a local computer store. She used
the computer for a week when the computer began to malfunction. She returned it to the
store, where the store manager assured her that he could repair what he called a “minor
problem” in the computer. Two months had passed and Alice had already returned the
computer five times for repair. Alice finally gave up and demanded her money back.
Under these circumstances:
A. Alice is not entitled to revoke her acceptance of the goods because she did not reject
the goods when she first discovered the defect.
B. Alice should be entitled to revoke her acceptance because she accepted the goods
because of assurances by the seller that the nonconformity would be cured.
C. Alice cannot revoke her acceptance because the value of the computer is impaired by
the defect which causes it to malfunction.
D. Alice cannot revoke her acceptance but she is entitled to damages for breach of
warranty under the UCC.
Answer:
The independent agencies often exercise _____ to gain access to witnesses and
documentary evidence, as many people will not voluntarily cooperate with information
requests.
A. the power of eminent domain
B. a subpoena power
C. an enforcement power
D. a coercive power
Answer:
Which of the following denotes an injury to a person’s reputation?
A. Disparagement
B. Defamation
C. Battery
D. Malice
Answer:
The abbreviated rule of reason analysis applies to:
A. restraints in which the overall reasonableness can be ascertained without a thorough
examination of their pernicious and beneficial effects in the relevant markets.
B. restraints that have an obvious adverse impact on competition, but whose overall
reasonableness cannot be immediately ascertained.
C. fully competitive behavior.
D. restraints that deserve a per se treatment because of their obvious unreasonableness.
Answer:
The test of an agent’s express authority is:
A. the justifiable belief of the agent.
B. the specific language the principal used in granting the authority.
C. the technical label given to an agent.
D. the surrounding circumstances such as the words and conduct of the parties.
Answer:
The Real Estate Settlement Procedures Act:
A. requires that buyers receive advance disclosure of the settlement costs that will be
incurred.
B. is designed to prevent discrimination in the housing market.
C. permits payments for referral of business to title companies.
D. requires that the title insurance be purchased from the company specified by the
seller.
Answer:
The value assigned to shares in the articles of incorporation is referred to as:
A. stated value.
B. par value.
C. fair value.
D. capital surplus.
Answer:
An investor seeking to recover stock market losses from a CPA firm, based upon an
unqualified opinion on financial statements that accompanied a registration statement,
must establish that:
A. there was a false statement or omission of a material fact contained in the audited
financial statement.
B. he/she assumed the financial statements to be accurate.
C. the investor completely relied on the CPA firm’s opinion for investing in the stock
market.
D. the losses were the result of a downturn in the price of securities.
Answer:
The claims and defenses to payment of an instrument that go to the validity of the
instrument are called:
A. real defenses.
B. personal defenses.
C. claims in recoupment.
D. claims to an instrument.
Answer:
When agents make advances from their own funds in conducting the principal’s
business, the principal:
A. has no duty to reimburse the agent because the agent has assumed the burden.
B. has a duty to reimburse the agent for expenses incurred for the principal.
C. has a duty to reimburse the agent even if the agent is not acting within the scope of
his/her authority.
D. has no duty to reimburse the agent because the agent commingled fungible goods.
Answer:
Which of the following statements is TRUE for gift cards?
A. They are subject to TILA regulations.
B. Recipients have 2 years to use the cards.
C. A fee can be assessed if the card has not been used within 6 months.
D. A fee can only be assessed if a customer is first notified of the fees.
Answer: