1.

_____ refers to saying defamatory things about a competitor's service offering.

Select one:

a.Bait-and-switch advertising

b.Horizontal integration

c.Product disparagement

d.Vertical integration

2.

"Goods" under Article 2 would include

Select one:

a.a promissory note

b.standing timber

c.a patent

d.Two of the above

3.

A buyer of consumer goods, for value, who has no knowledge of any security interest, takes

Select one:

a.subject to any purchase-money security interest perfected automatically.

b.subject to any security interest in the goods.

c.free of any pmsi perfected automatically.

d.free of any security interest perfected by filing a financing statement.

4.

A corporation may effectively limit the liability of directors' duty of due care by __________

Select one:

a.Using corporate funds to buy directors liability insurance

b.Using the derivative action rule

c.Specifying in the articles of incorporation that directors will not be liable for willful negligence.

d.a and b

5.

A payee who has no existence or is intended to have no interest in the instrument is a(n) _____.

Select one:

a.imposter

b.holder

c.carrier

d.fictitious payee

6.

Directors all have duties of due care to the company,

Select one:

a.but are not liable for any sub-committee decisions.

b.and cannot delegate decisions regarding dividends and mergers

c.and are personally liable for criminal acts by managers whom they appoint

d.but may delegate decisions to one or more directors and avoid liability

7.

G&C Inc. has outstanding 10,000 shares with par value of ten dollars and Tiffany owns 5,000 of those shares. At the annual meeting, the shareholders decide to issue an additional 10,000 shares at par and to sell them to Sharon. Tiffany vehemently objects in order to protect dilution of her percentage of share ownership. Tiffany is exercising her _____ in this scenario.

Select one:

a.cumulative voting rights

b.preemptive rights

c.abatement rights

d.proxy rights

8.

In which situation would a buyer not be one "in the ordinary course of business"?

Select one:

a.Alice buys a computer from her roommate.

b.Bob buys cardboard boxes from an on-line store.

c.Carleen buys cutlery from her friend Janine's home-goods store.

d.Delores buys liquor from Supermarket.

9.

It is not a deceptive trade practice:

Select one:

a.if a well-known personality endorses a product without disclosing that he or she is being paid to do so.

b.if a well-known retailer baits a prospective customer by dangling an alluring offer and removes the offer once the customer arrives.

c.for a well-known personality to endorse two competing products at the same time.

d.if a well-known seller conducts a "contest" to promote its product, but never awards any prizes.

10.

Of the following, _____ is a real defense.

Select one:

a.failure of consideration

b.prior payment

c.breach of warranty

d.fraudulent alteration

11.

Regardless of the type of contract, the _____, which is the offer to make delivery, must be kept open for a reasonable time.

Select one:

a.tender

b.auction

c.replevin

d.warranty

12.

The drawee is:

Select one:

a.one who directs a person or entity, usually a bank, to pay a sum of money stated in an instrument.

b.the person or entity that a draft is directed to and that is ordered to pay the amount stated on it.

c.the one who pledges to honor the draft as written.

d.the party that signs a promissory note.

13.

Under the Code, an acceptance that varies from the offer

Select one:

a.violates the "mirror image" rule and is not effective as an acceptance.

b.cannot legally be communicated to the offeror.

c.would be an acceptance even if the offeree conditions its acceptance on the offeror's assent to the different terms.

d.is an acceptance unless the variation is material or objected to.

14.

Under the Uniform Commercial Code of offer and acceptance as a contract issue, _____.

Select one:

a.merchants should be held to particular standards because they are more experienced

b.an offer can be revoked at any time prior to acceptance unless the offeror has given the offeree an option

c.if the acceptance differs from the offer, no contract results

d.a contractual obligation may arise even if the agreement has open terms

15.

What is the significance of President Lyndon Johnson's Executive Order 1126?

Select one:

a.It prohibits private discrimination by federal contractors.

b.It prohibits the formation of hot cargo agreements.

c.It prohibits companies to enter into agency shop agreements.

d.It prohibits companies to enter into yellow-dog contracts.

16.

Which of the following is an example of quid pro quo?

Select one:

a.The interviewer feels that Rachael is overqualified to work as an editor.

b.E&T airlines made it mandatory for all its female employees to wear high heels during work hours.

c.Harry is often asked to work overtime because he is a bachelor.

d.Ariana's boss promised her a promotion if she went out on a date with him.

17.

Which of the following is true in case of express warranties?

Select one:

a.An express warranty is one created by law, acting from an impulse of common sense.

b.An affirmation of the value of the goods or a statement purporting to be merely the seller's opinion does not form a warranty.

c.A warranty imposed by law that comes along with a product automatically.

d.Claims of breach of express warranty are claims of misrepresentation.

18.

Which of the following is true in case of implied warranties?

Select one:

a.An implied warranty is created whenever the seller affirms that the product will perform in a certain manner.

b.Implied warranty is one created by law, acting from an impulse of common sense

c.An implied warranty, in contrast to express warranty, is one in which specific language compel reading into the sale.

d.Implied warranties go to the essence of the bargain.

19.

Which of the following is true of a Trade Regulation Rule?

Select one:

a.A violation of a trade regulation rule is treated exactly like a violation of a federal statute.

b.It is a short statement on an administrative proceeding.

c.After promulgating a trade regulation rule, the federal commission must publish its intention to do so in the Federal Register and must hold open hearings on its proposals.

d.Draft versions of a trade regulation rule are seldom made available to the public.

20.

Which of the following must a transferee fulfill in order to be a holder in due course?

Select one:

a.Have a valid reason to question the instrument's authenticity

b.Be able to issue an enquiry into the face value of a negotiable instrument

c.Should not hold a negotiable instrument

d.Should accept that the instrument contains an unauthorized signature or has been altered

e.Should be able to question whether the instrument has been dishonored or not

21.

Which of the following stands true for personal defense?

Select one:

a.Personal defense is good against a holder in due course.

b.Forgery is a personal defense to an action by a holder in due course.

c.A holder in due course is not subject to the obligor's personal defenses.

d.Fraud in the execution is a personal defense against any holder, including a holder in due course.

22.

Which of the following stands true for personal defense?

Select one:

a.Personal defense is good against a holder in due course.

b.Forgery is a personal defense to an action by a holder in due course.

c.A holder in due course is not subject to the obligor's personal defenses.

d.Fraud in the execution is a personal defense against any holder, including a holder in due course.

e.If the holder knows that a note has already been paid, she cannot enforce it. This is a personal defense.

23.

Which of these are unfair trade practices that the FTC is likely to challenge?

Select one:

a.failing to substantiate material representations in advertisements before publishing them or putting them on the air

b.making a direct comparison (even if true) about your product's qualities versus a competitor's product.

c.taking unconscionable advantage of certain consumers or exploiting their service offering.

d.a and c

24.

Which product would be defective under strict products liability?

Select one:

a.150 proof vodka that causes intoxication and liver damage after years of use.

b.Cigarettes that causes cancer and heart disease after some years of use.

c.Coffee that is served hot enough to cause burns.

d.An electric stove that, when the oven door is opened, gives a serious electrical shock.

25.

Who among the following have the least decision-making authority in the management of a corporation's daily affairs?

Select one:

a.A company's director

b.A company's employee

c.A company's manager

d.company's stockholder