1) Ken is the president of a large company. Company executives approached Ken about purchasing some smaller companies to expand the business. Ken read the reports explaining the potential risk and return of the investment, and he decided the purchase appeared to be a good investment. Unfortunately, Ken was wrong, and the purchase caused the company to lose millions of dollars. Based on these facts, Ken.

a. Should benefit from the business judgment rule.

b. Violated his duty of loyalty to the corporation.

c. Violated his duty of due diligence to the corporation.

d. Should benefit from the fairness rule.

2) Some states require that a merger involving an LLC have a __________ rather than the two-thirds majority required of corporations.

a. 51-percent majority vote

b. Unanimous approval

c. One-third majority vote

d. Four-fifths majority vote

3)___________ gives shareholders more voting control, because this voting method states that each share of stock has as many votes as there are directors to be elected.

a. A pooling agreement

b. Proxy voting

c. A voting trust

d. Cumulative voting

4) During the voir dire of the jury, __________ the right to ask questions to determine who is allowed to sit on the jury.

a. Only the plaintiff has

b. Either party has

c. Both parties have

d. Only the judge has

5)______________ is an ADR process by which an agency invites the people and the organizations that would be affected by a new rule to have input into the writing of that rule.

a. Negotiated rulemaking

b. Med-arb

c. Mediation

d. A private civil trial

6)____________ jurisdiction is the power of the court to hear a case based on internet-related transactions.

a. Cyber-

b. Science

c. Subject matter

d. General

7) For most business decisions, the quorum, or minimum number of directors necessary to conduct business, is usually ___________ of the total number of directors.

a. Two-thirds

b. One-half

c. Three-quarters

d. A majority

8) Carl was arrested under New Jersey statute that made it a crime to be persistently unemployed. Carl argues that a similar statute was declared unconstitutional by the California state court, so the New Jersey state court is required to declare New Jersey's statute unconditional. Carl is wrong because

a. More than one court has to rule a certain way before precedent is established.

b. State courts aren't bound by precedent.

c. Out-of-state cases aren't binding precedent in state courts.

d. Only federal courts can create binding precedent

9) Scott seeks a type of ADR that will end this case, one way or the other. His best choice is

a. Summary jury trial

b. Early neutral evaluation

c. Mediation

d. Binding arbitration

10) If Drake, a shareholder of Sweet Corp., feels that he has been deprived of the right to purchase some of the corporation's newly issued stock, he can bring

a. Both a derivative suit and a direct suit against Sweet's corporate management

b. No legal recourse against Sweet's corporate management.

c. A derivative suit against Sweet's corporate management

d. A direct suit against Sweet's corporate management

11)To bring a derivative suit, a shareholder must own stock at the time of the

a. Injury and at the time of the suit

b. Suit only

c. Injury only

d. Trial, suit, and injury

12) The U.S. Court of Appeals for the Federal Circuit was established by Congress primarily to

a. Hear appeals on questions of law from the lower courts

b. Streamline and unify patent law

c. Decide on the details involved in bringing a case to trial

d. Simplify issues and avoid unnecessary arguments and surprises in trials

13) Adam is president of Well Inc. The board of directors instructs Bob not to borrow any money on behalf of the corporation. Bob does so anyway, and the corporation lacks income and assets to pay the debt. Bob will be personally liable for the debt under the

a. Business judgment rule

b. Actual authority rule

c. Corporate opportunity doctrine

d. Fairness rule

14) Attorney Jose wants to personally question Ellen, a witness about her observation of an auto accident in advance of a trial concerning the accident. Jose should

a. Send Ellen interrogatories

b. Ask Ellen to produce tangible evidence

c. Take Ellen's deposition

d. Issue a summons for Ellen to appear in court in advance of the trial

15) EG games Industries is a manufacturer of home video game machines and home video games. Johnson Department Store wants to market the home video games, but EG refuses to sell the games unless Johnson also agrees to purchase the home video machines. A court will most likely find such a restriction to be a/an

a. Lawful tying agreement

b. Unlawful tying agreement

c. Interlocking directorate

d. Per se violation

16) Under the Revised Uniform Partners

a. The partner is an aggregate rather than an entity in its own rights

b. Partnership property is owned by the partnership

c. Partners are co-owners of partnership property

d. Partners don't have transferable economic interests

17) Generally, if there are no modern court decisions or statutes dealing with an issue in dispute, court hearing the case will

a. Inevitably devolve

b. Ask the U.S. Supreme Court for an advisory opinion

c. Be unable to decide the case

d. Apply common law

18) Sal is a shareholder in XYZ Corporation. XYZ Corporation made a defective product, and many individuals have filed lawsuits due to the defects. As a shareholder, Sal may

a. Be held personally liable only if the plaintiff's name Sal as a defendant

b. Be held personally liable only if the corporation was aware of the defects

c. Be held personally liable for the defects

d. Not be held personally liable for the defects

19) A _________ refers to the exclusive control of a market by a business enterprise.

a. Common enterprise

b. Trust

c. Monopoly

d. Confederation

20) Rosa sues her neighbor. Rosa's lawyer relies on persuasive precedent. Which of the following statements are true?

a. The court should disregard the precedent unless it's from a U.S. Supreme Court case

b. The court is free to follow or ignore the persuasive precedent

c. The court must follow the precedent because it's binding

d. The court must overturn the precedent because it's not binding