1. Frank hired Sam to act as Frank's sales agent in his jewelry store. Frank gave Sam actual express authority to sell items of jewelry up to $1,000 without checking with Frank; however, if the price was over $1,000 Sam was to check with Frank before making a sale. One day a customer wanted to buy a necklace for $1,500 and Sam sold it to her without first checking with Frank. When Frank learned of this, he was upset because the price was a mistake; it should have been $3,000. Frank wants the customer to return the necklace. Is the customer required to return the necklace in this case?

Group of answer choices

Yes, because Sam did not have actual express authority to sell that item

No, because Sam did have apparent authority to sell that item.

No, because Sam did have implied authority to sell that item.

Yes, because Sam did not have actual implied authority to sell that item.

2. Under the business judgment rule, corporate managers:

Group of answer choices

must not compulsorily take care

make fully informed decisions

need not have a rational basis for their decisions

must have a conflict of interest

3. The corporate veil is most likely to be pierced and the shareholders held personally liable if

Group of answer choices

A partnership incorporates as a business solely to limit the liability of its partners

The corporation elects to be taxed under Subchapter S of the IRC

An ultra vires act has been committed

The shareholders have commingled their personal funds with those of the corporation

4. Which of the following owes a fiduciary duty to the corporation

Group of answer choices

Directors

Creditors

Employees

Shareholders