31- Which of the following is correct regarding judicial and legislative deference to a profession?

Multiple Choice

• Courts usually defer to the members of a profession in determining what the ordinarily prudent professional would do.
• Legislatures do not usually defer to the members of a profession in determining what the ordinarily prudent professional would do.
• Courts do not usually defer to the members of a profession in determining what the ordinarily prudent professional would do.
• It is irrelevant for a court to determine what the ordinarily prudent professional would do, since the legal standard is for the court to determine what ordinarily prudent juror would do.

34- A defendant who otherwise would be liable under Section 11 of the Securities Act of 1933 may escape liability by proving that he exercised __________.

Multiple Choice

• minimal care
• due diligence
• strict liability
• oversight authority

38- In the Omnicare, Incorporated v. NCS Healthcare, Incorporated case, the court held that __________.

Multiple Choice

• under the circumstances of the case, only the merger agreement was valid and enforceable
• the agreements were not valid and enforceable because reasonable doubt was raised as to whether the directors acted in good faith
• the agreements were not valid and enforceable because the directors were able to shield themselves from liability under the business judgment rule
• the business judgment rule was irrelevant in its determination of whether the voting agreement was valid and enforceable

40- The Securities and Exchange Commission (SEC) does not have the power to do which of the following?

Multiple Choice

• Impose fines for violation of securities laws
• Direct a defendant to stop violating the securities laws
• Desist a defendant from future violations of securities laws
• Issue injunctions against alleged violators of securities laws

41- The Securities Act of 1933 provides that the registration statement becomes effective automatically on the __________ after its filing, unless the Securities and Exchange Commission (SEC) delays or advances the effective date.

Multiple Choice

• seventh day
• tenth day
• twentieth day
• first month

42- Rule __________ of the Securities Exchange Act of 1934 prohibits insider trading on nonpublic corporate information.

Multiple Choice

• 10b-5
• 14e-3
• 14a-8
• 10c-7

46. Which of the following means knowledge on the part of the person making the representation, at the time when they are made, that they are false?

Multiple Choice

• Negligence
• In pari delicto
• Strict liability
• Scienter

47- An individual may be fined up to __________ and imprisoned for up to __________ for a criminal violation of the 1934 Act.

Multiple Choice

• $15 million;ten (10) years
• $5 million; ten (10) years
• $15 million; twenty (20) years
• $5 million; twenty (20) years

49- Which of the following is not a requirement that must be met for the business judgment rule to protect a manager from liability?

Multiple Choice

• The manager must make an informed decision.
• The manager must have no conflict of interest.
• The manager must have a rational basis for believing that the decision is in the best interests of the corporation.
• The manager must consult with at least three (3) experts who have foundational knowledge in the discipline related to the decision (for example, consulting with marketing experts prior to committing to a large-scale advertising campaign)