20. Trina pays a premium to United Insurance Corporation for fire insurance against the loss of her Viewpoint Office Building. After Trina sells the building to Wade, it burns down. Under the policy, United must pay a. neither Trina nor Wade. b. Trina and Wade. c. Trina only. d. Wade only. a. Whole life insurance provides protection with a cumulated cash surrender value that can be used as collateral for a loan. b. To avoid payment on a claim, an insurance company may raise any defense that would be valid in any action for breach of contract. c. Unless insurance proceeds are exempt under state law, a life insurance policy is an asset that is subject to the rights of judgment creditors. d. A fire insurance policy is assignable without the insurers consent because the policy runs with the insured property. e. None of the above. 22. Which of the following statements, if any, is false? a. Under a coinsurance clause, a homeowner who insures a home for 80 percent of its value can recover only 80 percent of the cost for damage to it. b. Normally, a fire insurance policy provides for an appraisal if the parties do not agree on the amount of a covered loss. c. Under an antilapse clause, an insurance policy will not lapse even if no payment is made on the date due. d. If a provision in an insurance policy is ambiguous, the provision will be interpreted against the insurance company. e. None of the above. 23. Which of the following statements, if any, is true? a. A fixture is not included in a sale of land unless the contract provides for it. b. The most common way to acquire personal property is to capture it. c. Production is a means of acquiring ownership of personal property. d. A gift is effective whether or not it is accepted. e. None of the above. 24. Carol is a director of Diners Restaurants, Inc. (Diners). Carol would most likely be found to have breached her duty of loyalty if she a. becomes a director of Fine Mattresses, Inc., a noncompeting firm. b. buys stock in Great Foods Corporation, a competing firm. c. votes for Diners to buy a controlling interest in Eats, Inc., which causes Diners to suffer a loss. d. votes against Diners' purchase of a controlling interest in Eats, Inc., which causes Diners to suffer a loss. 25. Philomena dies without a will. A court appoints Quigley to handle the probate of Philomenas estate. The administrator of the estate is a. Philomenas closest blood relative. b. Philomenas first-named heir. c. Quigley. d. the court. 26. Distribution, Inc. is a direct-mail distribution company. Like most corporations, Distribution's employees include its a. board of directors. b. incorporators. c. officers. d. shareholders. Fact Pattern for questions 27 and 28 Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf. 27. Refer to Fact Pattern for questions 27 and 28. Ray's suit is a shareholder's a. business-judgment rule suit. b. derivative suit. c. duty-of-care suit. d. duty-of-loyalty suit. 28. Refer to Fact Pattern for questions 27 and 28. Any damages recovered by Ray's suit will go to a. Ray. b. SBC. c. SBC's directors. d. the state in which SBC is incorporated. 29. Steel Tool Corporation and Thrifty Hardware Company combine so that all that remains after the papers have been signed is Steel Tool Corporation. This is a. a consolidation. b. a merger. c. a purchase of assets. d. a purchase of stock. 30. Precise Device Corporation, Inc. and Quality Instruments, Inc., decide to merge. This corporate combination does not require the approval of a. Precise and Quality's directors. b. Precise and Quality's officers and employees. c. Precise's shareholders. d. Quality's shareholders. 31. Shrimp Boat Company decides to consolidate its operations with Trawlers, Inc., to form Unique Fishers Corporation (UFC). Trawlers owed money to View Harbor Storage and other creditors. After the consolidation, UFC must pay a. all of Trawlers' debts. b. half of Trawlers' debts. c. none of Trawlers' debts. d. only debts that Trawlers incurred after consolidation was proposed. 32. Pink Boutique Company, Inc. (Pink Boutique) and Purple Kiosk Company, Inc. (Purple) decide to consolidate. This corporate combination does not require the approval of a. Pink Boutiques directors and Purple's directors. b. Pink Boutiques officers and employees and Purple's officers and employees. c. Pink Boutique's shareholders. d. Purple's shareholders. 33. Giant Lift Corporation (Giant Lift) purchases all of the assets of Heavy Hydraulics Corporation. With respect to Heavy Hydraulics Corporation's liabilities, Giant Lift is a. automatically responsible. b. not responsible under any circumstances. c. responsible if Heavy Hydraulics is a competitor of Giant Lift. d. responsible if the sale is actually a merger or consolidation