Question 1

Which of the following is a false statement regarding the liability of directors and officers for criminal behavior?

a)

Directors and officers can be held personally responsible for their own crimes.

b)

Directors and officers can be held personally responsible for the crimes of other employees within the organization when they have failed to adequately supervise the employee's behavior.

c)

An officer can be held criminally liable for the illegal conduct of an employee if the court determines that a responsible person would have known about and could have prevented the illegal activity.

d)

Directors and officers who use insider information to trade their corporation's stock for a profit can be held liable for breaching their fiduciary duty.

e)

According to the responsible person doctrine, a court may not find a corporate officer criminally liable for the illegal conduct of an employee unless the officer profited personally from the illegal activity.

Question 2

A partnership in which the partners divide profits and management responsibilities and share unlimited personal liability for the partnership's debts is called a ______________.

a)

general partnership

b)

limited partnership

c)

limited liability partnership

d)

corporation

e)

limited liability company

Question 3

In which type(s) of agency is the principal-agent relationship inferred from the conduct of the parties?

a)

Expressed agency

b)

Agency by estoppel

c)

Implied agency

d)

Agency by estoppel and implied agency, but not expressed agency

e)

Expressed agency, agency by estoppel, and implied agency

Question 4

The Securities and Exchange Commission has established that any shareholder who owns more than _______________ worth of stock in the corporation can submit proposals to be included in proxy materials.

a)

$4,000

b)

$3,000

c)

$2,000

d)

$1,000

e)

$500