exam #4

What are the advantages of the corporate form of organization? (Check all that apply.)

Many investors may be conveniently brought together. Ownership may be divided into many unequal shares. Shareholders may be employees entitled to such benefits as workers' compensation.

The defense under the Securities Act of 1933 which suggests that the mistake/misrepresentation should not have had an impact on the purchaser's decision-making process is called?

Materiality

Which organization created by Sarbanes Oxley in 2002, "watches the auditors" (hint: see your Power Point Lecture)?

PCAOB

The Supreme Court's state action exemption to the Sherman Act is also referred to as the _____.

Parker v. Brown doctrine

What happens under the premerger notification program required by the Hart-Scott-Rodino Antitrust Improvements Act?

Parties to a merger wait 30 days for the U.S. Department of Justice and the Federal Trade Commission to conduct their review.

Identify the categories of analysis for potential violations of the Sherman Act. (Check all that apply.)

Per se illegality The rule of reason

_________ takes place when a firm sells at below cost in order to drive out competition.

Predatory Pricing

Identify the parties involved in the application of agency law. (Check all that apply.)

Principals Agents

Match the powers of the Securities and Exchange Commission (SEC) (in the left column) with their descriptions (in the right column). Instructions

Quasi-legislative power-Under this power, the SEC adopts rules and regulations relating to financial and other information that must be furnished to the Commission. Quasi-judicial power-Under this power, the SEC involves itself in a variety of investigations.

Which of the following are major provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010? (Check all that apply.)

Reforms Federal Reserve Regulates trading of derivatives Creates mortgage reforms

Identify the major provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. (Check all that apply.)

Reforms regulations of banks and thrifts Enhances consumer protection Regulates hedge funds and credit rating agencies

Identify the parties that make up a vertical business relationship. (Check all that apply.)

Retailers Distributors Manufacturers

Which form of business is limited to 100 shareholders, is protected like a corporation, and taxed like a partnership?

S-Corp

The registration statement and prospectus are required to be filed under which of the following?

Securities Act of 1933

What does SEC stand for?

Securities and Exchange Commission

Identify the groups present in the corporate form of organization. (Check all that apply.)

Shareholders Directors Officers

Which Anti Trust regulation law was passed in 1890?

Sherman

Which one of the following is a traditional/basic form of business organization according to your power point presentation and chapter?

Sole Proprietorship

The Parker v. Brown case exempts ____ from Sherman.

State Government

Identify a way in which the Clayton Act is different from the Sherman Act.

The Clayton Act is more specific than the Sherman Act in declaring certain enumerated practices in commerce illegal.

Which of the following acts was passed by Congress in 2010 following the near collapse of the United States economy in the autumn of 2008?

The Dodd-Frank Wall Street Reform and Consumer Protection Act

Identify a true statement about the three interacting parties involved in the application of agency law.

The actions undertaken by agents implicate contract, tort, or criminal law.

Identify the examples that illustrate the advisory functions of an administrative agency. (Check all that apply.)

The agency reports information to the general public that should be known in the public interest. The agency proposes new legislation to Congress.

Identify the disadvantages of the corporate form of organization. (Check all that apply.)

The cost of forming and maintaining a corporation is significant. Franchise taxes and license fees are assessed against corporations. Corporations are subject to more governmental regulation at all levels than are other forms of business.

There are eight firms in a market, each with a 15% share in the market. Calculate the Herfindahl-Hirschman Index (HHI).

1800 points

How many days does the waiting period typically last?

20 days

Identify an example that illustrates horizontal competitors.

Cloud Inc. and Latitude Inc. are suppliers of electronic goods in East Hampton.

One strategy to control the resale price is for a company to announce its prices and refuse to deal with those who fail to comply. This is known as the _____ Doctrine.

Colgate

Match the various elements in restraint of trade that are prohibited by Section 1 of the Sherman Act (in the left column) with their descriptions (in the right column). Instructions

Contracts-They usually result from written or verbal agreements. Combinations-They usually result from conduct.

Match the liabilities imposed for violations under the federal Securities Act of 1933 (in the left column) with their descriptions (in the right column).

Criminal liability-It results from fraud in any offer or sale of securities or from a willful violation of the act. Civil liability-It usually involves a buyer of securities suing for a refund of the investment.

In the context of the violations of the federal Securities Act of 1933, identify the individuals who are held liable under the civil liability provision of Section 11 of the Securities Act of 1933. (Check all that apply.)

Every underwriter Every partner in the partnership or the director of the corporation issuing the security Every person who signed the registration statement

In the context of the rule of reason, identify the factors that form the bases of unreasonableness. (Check all that apply.)

Evidences that contracts were intended to enhance prices and restrain trade The nature or character of contracts

Which one of the following is NOT exempt from Sherman (make sure to review your Power Point Lecture and Areas of Emphasis Sheet)?

Financial institutions (banks)

An example of a horiztonal territorial agreement is which of the following?

Ford agrees to take the City of Rome and GM agrees to take the City of Cartersville (neither will open a dealership in the others town)

What are the responsibilities of the secretary of a U.S. administrative agency? (Check all that apply.)

He or she acts as the legal custodian of the agency's records. He or she usually signs orders and official correspondence. He or she coordinates the activities of the agency with others involved in the regulatory process.

Identify the characteristics of the chairperson of a U.S. administrative agency. (Check all that apply.)

He or she is somewhat more important than the other agency members because of visibility. He or she usually belongs to the same political party as the president.

Identify the responsibilities of the general counsel of a U.S. administrative agency. (Check all that apply.)

He or she often makes the decision to file suit or pursue other remedies. He or she represents the administrative agency in court.

According to your Areas of Emphasis sheet and the textbook, the court typically applies per se analysis to which types of cases?

Horizontal

If Rite Aid and Walgreens merge, what would this be called?

Horizontal merger.

Identify the most significant creation-related issues that a businessperson faces when establishing a business organization. (Check all that apply.)

How long it will take to build a particular organization How much paperwork is involved

Identify the true statements about ways in which the legislature can control the administrative process. (Check all that apply.)

It can enact specific legislation contrary to rules adopted by an administrative agency. It can provide additional procedural requirements for an administrative agency's adjudications. It can control and review administrative activity by abolishing an administrative agency.

In the context of the control that the legislature exercises over the administrative process, which of the following is true of the legislature?

It can limit appropriations of funds to an administrative agency.

Identify a true statement about the Public Company Accounting Oversight Board (PCAOB).

It consists of five members appointed by the commissioners of the Securities and Exchange Commission.

Identify the features of a trust. (Check all that apply.)

It controls production and establishes price levels in the market. It is used by a group of corporations in the same type of business to eliminate competition among themselves. It allows all or at least a majority of the stock of several companies to be transferred to a trustee.

Identify a true statement about the liability imposed by the first subsection under Section 12 of the Securities Act of 1933.

It exists regardless of the intent or conduct of those who fail to comply with the registration requirements.

Identify a true statement about the Securities Act of 1933.

It is a disclosure law with respect to the initial sale of securities to the public.

Identify the true statements about regulation. (Check all that apply.)

It is a form of taxation. It adds to the cost of doing business. It tends to protect cozy competition.

Identify the attributes of the doctrine of primary jurisdiction. (Check all that apply.)

It is applicable when enforcement of a claim requires the resolution of issues that have been placed before an administrative body. It is invoked when referral to an agency is preferable because of its expertise in dealing with the matter in controversy.

Identify the true statements about Section 2 of the Sherman Act. (Check all that apply.)

It is directed at single firms. It establishes that it is a violation for a firm to conspire to monopolize any part of interstate or foreign commerce.

Which of the following are the uses of the Herfindahl-Hirschman Index (HHI)? (Check all that apply.)

It is used to measure market concentration. It is used to determine the impact of a proposed merger.

Identify the functions that the Federal Trade Commission (FTC) performs. (Check all that apply.)

It lays down guidelines that are administrative interpretations of the statutes the commission enforces. It prevents wrongful actions by the use of cease and desist orders. It issues trade regulation rules that deal with business practices in an industry.

Identify the true statements about the Securities Exchange Act of 1934. (Check all that apply.)

It makes the sale of a security on a national exchange illegal unless a registration is effective for the security. It requires filing forms with the Securities and Exchange Commission and the applicable stock exchange. It deals with regulation of securities exchanges, brokers, and dealers in securities.

Which of the following are required of a prospectus prior to the sale of securities? (Check all that apply.)

It must be furnished to interested investors to help them make wise investment decisions. It must conform to the statutory requirements.

In the context of the creation of a limited partnership, identify the true statements about a limited partnership certificate.

It must be recorded in the county where the partnership has its principal place of business. It contains the name of the partnership and the character of the business.

Identify the true statements about a non-profit organization. (Check all that apply.)

It must return any profits made to the organization to be used for future operations. It is not created for the personal benefit of owners or members

In the context of the accounting reforms introduced by the Sarbanes-Oxley Act of 2002, what are the features of the Public Company Accounting Oversight Board (PCAOB)? (Check all that apply.)

It reports to the commissioners of the Securities and Exchange Commission. It provides oversight to accounting firms that audit public companies.

In the context of the creation of corporations, identify the true statements about a corporate name. (Check all that apply.)

It typically includes one of the following words or end with an abbreviation of them: "corporation," "company," "incorporated," "limited." It is an asset and an aspect of goodwill.

Identify the true statements about a limited liability company. (Check all that apply.)

Its owners have more flexibility than those of an S corporation. It is created through filings like those used when creating a corporation.

What does LLC stand for and what are the owners called?

Limited Liability Company (LLC), members

Match the subsections of Section 12 of the Securities Act of 1933 (in the left column) with the liabilities imposed by them

The first subsection of Section 12- it imposes liability on those who sell or offer securities that are not registered with the Securities and Exchange Commission. The second subsection of Section 12-It imposes liability on sellers who make communications or use a prospectus that contain an untrue statement of material facts required to be stated.

Match the subsections of Section 12 of the Securities Act of 1933 (in the left column) with the liabilities imposed by them (in the right column).

The first subsection of Section 12-It imposes liability on those who sell or offer securities that are not registered with the Securities and Exchange Commission. The second subsection of Section 12-It imposes liability on sellers who make communications or use a prospectus that contain an untrue statement of material facts required to be stated.

In the context of the creation of a corporation, identify the information contained in the articles of incorporation. (Check all that apply.)

The number of authorized shares in the organization The proposed corporation's period of duration The proposed name of the corporation

Match the categories of analysis for potential violations of the Sherman Act (in the left column) with their descriptions (in the right column). Instructions

The rule of reason-It consists of practices and agreements that are illegal only if they impose an unreasonable restraint upon competitors. Per se illegality-It consists of agreements or practices that are so plainly anticompetitive and so lacking in any redeeming values that they are conclusively presumed to be illegal.

Who is responsible for the publication of all actions of a U.S. administrative agency in the Federal Register?

The secretary

Identify the true statements about the quasi-legislative authority delegated to administrative agencies. (Check all that apply.)

The use of broad standards ensures that the authority delegated to an agency has limitations. The delegation of substantial discretion is given to the agency and not to the judiciary.

In the context of the settlement of a lawsuit, identify the true statements about a consent order. (Check all that apply.)

There is no admission that the accused has been guilty of a violation of the law. There is an agreement not to engage in the activities that were the subject of the complaint.

Identify a true statement about trusts.

They are a legal arrangement in which a fiduciary holds legal title to property for benefit of another.

Which of the following are true of the significance of tombstone ads? (Check all that apply.)

They declare from whom a prospectus may be obtained. They identify the security and state its price. They announce by whom security orders will be executed.

Identify a true statement about the advisory opinions of an administrative agency.

They give a business an indication of the view the agency would take if the practice in question is formally challenged.

Identify a true statement about corporations.

They have higher costs of formation than partnerships.

Identify a true statement about limited partners.

They may assign their interests to others without dissolving the limited partnership.

Identify the functions of administrative law judges of a U.S. administrative agency. (Check all that apply.)

They use prior decisions or precedent. They apply the law to the facts. They hear cases of alleged law violations.

Identify a responsibility of the chairperson of a U.S. administrative agency.

To appoint staff

Why do manufacturers try controlling the ultimate retail price for their products? (Check all that apply.)

To maintain adequate channels of distribution To maintain a high-quality product image

Why were the administrative agencies created? (Check all that apply.)

To protect the public, especially from the business community To impart specificity To provide expertise

In the context of the doctrine of exhaustion of remedies, identify the situations when courts would generally refuse to review administrative actions.

When an area of an administrative agency's specialization or expertise is involved When the administrative remedy is just as likely as the judicial one to provide appropriate relief

Which of the following IS a function of an agency?

Which of the following IS a function of an agency?

The Supreme Court has historically held that a security exists when _____.

a person invests money and looks to others to manage the money for profit

Match the types of administrative agencies (in the left column) with the descriptions of their regulatory authority (in the right column). Instructions

a quasi-legislative agency-It can issue rules that have the impact of laws. a quasi-judicial agency- It can make decisions like a court.

Under the Securities Exchange Act of 1934, someone who learns of nonpublic information from an insider and uses that information to make an investment is a(n)?

a tippee

According to your Power Point Lecture, the Sarbanes Oxley Act of 2002 was passed in reponse to?

accounting scandals at Enron, Tyco, and Worldcom

Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 specify that a defrauded purchaser's damages are _____.

actual out-of-pocket losses

The commissions, bureaus, organizations, and boards that make up the governmental bureaucracy are known as .

administrative agencies

The term _________ describes the boards, bureaus, commissions, and organizations that make up the governmental bureaucracy.

administrative agencies

According to your areas of emphasis sheet, taking a company from being privately held to publicly traded (for the first time) is called?

an Initial Public Offering

In the context of standing to sue, the Federal Administrative Procedure Act provides for judicial review except where _____.

an agency action is committed to agency discretion by law

Match the roles played by parties complying with the disclosure requirements of the Securities Act of 1933 (in the left column) with their descriptions (in the right column). Instructions

an issuer-A business organization or individual offering a security for sale to the public an underwriter-One who participates in the original distribution of securities by selling such securities for an issuer or by guaranteeing their sale a seller- One who contracts with a purchaser or who is a motivating influence that causes the purchase transaction of a security to occur

A feature of the Sarbanes-Oxley Act of 2002 is that it _____.

applies to all public companies in the United States and emphasizes the importance of accurate financial records

In the context of government control over an administrative process, the role of the executive branch of government is to _____.

appoint the top officials of an agency with the advice and consent of the legislative branch

One of the functions of the administrative process is to decide issues expeditiously. To proceed expeditiously usually means that administrative agencies _____.

are free from the strict rules of evidence used by courts

The use of sole proprietorship as a business organization is very limited because it _____.

cannot be created by multiple owners

A type of administrative agency action that requires a violator to stop an objectionable activity and refrain from any further similar violations is known as a(n) _____________________ order.

cease and desist

According to the Sarbanes Oxley Act of 2002, the CEO of a company must ______ the financial statements.

certify the accuracy

In a U.S. administrative agency, the executive director for administration is the _____.

chief operating official of the agency

Match the types of business organizations (in the left column) with their examples (in the right column). Instructions

closely held organizations-Family-operated and family-owned businesses publicly held organizations-Businesses whose stock is traded on a public exchange

Match the types of business organizations (in the left column) with their descriptions (in the right column). Instructions

closely held organizations-They are owned by only a few persons. publicly held organizations-They may be owned by hundreds of persons.

The overall goal of the Sherman Anti Trust Act was?

competition

Competitors sometimes attempt to share some activities or join together in the performance of a function. These are known as .

concerted activities

When competitors attempt to share activities or join together in the performance of a function it is called:

concerted activities

The issuance of a(n) ______________ ____________ requires that an organization or individual accused of a violation admit to the jurisdiction of the adjudicating agency and waive all rights to seek a judicial review.

consent order

Section 1 of the Sherman Act prohibits _____.

conspiracies, contracts, and combinations in restraint of commerce or trade

According to the Sarbanes Oxley Act of 2002, accounting firms can no longer perform both audit and ____ function for the same company.

consulting

Which of the evaluation deals with issues of death, retirement, and withdrawal by owners?

continuity

According to the Power Point Lecture, ____ and ____ are advantages (pro) and _____ is the major disdavantage (con) for a corporation.

continuity, limited liability, double taxation

An issue of major importance to owners of a business organization is ___________ , so much so their own egos often insist on it.

control

Many individuals prefer the corporate form of organization because _____.

control may be held by those with a minority of the investment

As a form of business, a corporation may not be always beneficial because _____.

corporate income may be subject to double taxation

According to your Power Point Lecture, which form of business organization generates the largest amount sales in the United States?

corporation

In the context of the different forms of business organizations, an artificial, intangible entity created under the authority of a state's law is known as a(n) .

corporation

Horizontal competitors are firms that _____.

could compete for the same customers in the same market

In the context of the significant factors one should consider when selecting the best organizational form for a business activity, _____ refers to the legal steps necessary to form a particular business organization.

creation

Match the liabilities imposed for violations under the federal Securities Act of 1933 with their characteristics. Instructions

criminal liability- It leads to a substantial fine or five years in prison or both. civil liability-It is significant because the investors' money typically is lost at the time of this claim.

To avoid the double taxation of corporate income, it is advisable for a corporation to _____.

deduct reasonable salaries paid to corporate officials in computing the taxable business income

The investigative power of an administrative agency includes _____.

determining whether there has been a violation of any law

A feature of U.S. administrative agencies is that they _____.

develop their own rules of procedure unless mandated otherwise by an act of the legislature

A partnership is a form of business organization that _____.

does not require permission from each state in which it does business

Match the types of corporations (in the left column) with their descriptions (in the right column). Instructions

domestic corporation-A corporation is called so in the state in which it is incorporated. foreign corporation-A corporation is called so in places other than the state in which it is incorporated. alien corporation-A corporation created under the authority of a foreign country may be called so.

According to your Areas of Emphasis Sheet, which defense says that you "crossed your t's and dotted your i's and that you followed the rules in the preparation of the documents"?

due diligence

According to the Power Point Lecture, _____ is the major advantage (pro) and _____ is the major disadvantage (con) for a sole proprietorship.

ease of creation, unlimited liability

The regional offices of a U.S. administrative agency usually have a(n) _____ function.

educational

When a contract which contains a provision that one party or the other (buyer or seller) will deal only with the other party, the illegal arrangement under Clayton is called?

exclusive dealings

Non-profit organizations differ from corporations in that non-profits are _____.

exempted from paying tax on income

Match the judicial doctrines (in the left column) with their descriptions (in the right column). Instructions

exhaustion of remedies-It is applicable when a claim must go in the first instance to an administrative agency alone. primary jurisdiction-It is applicable when a claim is originally filed in the courts.

True or false: A dissolution destroys the business of a partnership.

false

True or false: A horizontal territorial agreement is legal per se under the Sherman Act.

false

True or false: An individual and a corporation cannot agree to create a business in the form of a partnership.

false

True or false: In the context of an employer's contractual liability arising from an agent's acts, oral instructions given by the employer to an employee cannot create actual authority.

false

True or false: Registration under the 1934 Securities Exchange Act does not require filing prescribed forms with the applicable stock exchange and the Securities and Exchange Commission.

false

True or false: Simply alleging that a person is the sole owner of a corporation that is engaged in wrongful activity will result in a piercing of the corporate veil.

false

True or false: Some analysts consider product extension and geographic extension mergers to be vertical ones.

false

True or false: The Supreme Court defines a "security" very narrowly as a corporate stock only.

false

True or false: The doctrine of exhaustion of remedies permits the premature interruption of the administrative process and leads to unusual expenses.

false

True or false: The guidelines laid down by the Federal Trade Commission (FTC) are applicable only to its staff.

false

True or false: The mere existence of most government programs automatically restricts the creation of new administrative agencies or limits the functions of the existing agencies.

false

True or false: Under the Securities Act of 1933, proof of an intentional violation is usually not required for imposing criminal or civil sanctions.

false

True or false: Violations of a cease and desist order are not punishable by fines.

false

In the context of insider transactions, the Securities and Exchange Commission requires that insiders _____.

file a statement of the amount of issues of which they are owners at the time of registration

According to the Power Point Lecture and textbook, a corporation operating outside the state that it is incorporated but inside the country it is incorporated in is called a?

foreign corporation

Sections 10(b) and 10(b)-5 of the 1934 Act, foucs on ______.

fraud

Owing to the investigative power of administrative agencies, they can _____.

gather information concerning the business practices of any corporation engaged in commerce

George is involved in the initial sale of securities and complies with the disclosure agreements of the 1933 Securities Act. If George plays the role of a controlling person, this means that he _____.

governs or is governed by issuers

Which act was passed in 1976 to provide for premerger notification?

hart-scott rodino

To execute their rule-making function, U.S. administrative agencies issue guidelines that _____.

help businesses determine if certain practices may or may not be viewed as legal

An agreement between competitors such as Publix and Kroger to set prices is known as?

horizontal price fixing

During the Christmas season, five leading airlines agree to raise ticket prices by 15 percent. In this scenario, the type of agreement made by the airlines is known as _____.

horizontal price fixing

Starz Corp. and Elegance Corp. are leading apparel manufacturers. When another potential apparel manufacturer, Blueline Corp., enters the market, Starz Corp. and Elegance Corp. jointly agree to reduce the price of their fall collection. In this scenario, Starz Corp. and Elegance Corp. have engaged in _____.

horizontal price fixing

___ ___are agreements that horizontal competitors make with each other to offer certain products or price goods at a certain level.

horizontal restraint

The exchange of pricing information between competitors is called?

indirect price fixing

Although violations of the original Clayton Act were not crimes, the act provided that _____.

individuals or organizations injured by a violation could obtain injunctive relief on their own behalf

Section 16 of the Securities Exchange Act of 1934 concerns _____.

insider transactions

The term "antitrust laws" is used today to describe all laws that _____.

intend to promote and regulate competition

In the context of factors influencing administrative agency decisions, due process of law requires that _____.

interested parties be given notice of the proposed rule before it may be adopted by an agency

The role of the regional offices of U.S. administrative agencies is to _____.

investigate alleged violations of the law

In the context of the Securities Act of 1933, during the waiting period involved in the securities registrations process, the staff of the Securities and Exchange Commission _____.

investigates the accuracy of the registration statement

A feature of a partnership is that it _____.

is easily formed when compared to other forms of business organizations with the exception of a sole proprietorship

A characteristic of sole proprietorship is that it _____.

is the easiest business organization to create

According to your Power Point Lecture, the company who is going public (i.e. offering their stock to the public) is called?

issuer

Section 11 of the Securities Act of 1933 applies to civil liability of individuals involved in _____.

issuing false or misleading registration statements

U.S. administrative agencies exercise their quasi-legislative power by _____.

issuing rules and regulations that have the force and effect of law

A feature of the doctrine of primary jurisdiction is that _____.

it ensures uniformity and consistency in dealing with matters entrusted to an administrative body

A feature of a limited liability company is that _____.

it is treated as a nontaxable entity for federal income tax purposes

In the context of government control over administrative processes, a feature of the executive branch of government is that _____.

it makes budget recommendations to the legislature

Which of the following IS accurate regarding the SEC?

it was created by 1934 Securities Exchange Act

According to the Securities Act of 1933, during the prefiling period involved in the registration process, it is _____.

legal for the issuer of a security to engage in preliminary agreements and negotiations with underwriters

Which one of the folloiwng is NOT a way to influence Agency Decisions as outlined in your textbook?

limit judicial proceedings

In the context of the judicial review of agency adjudications, the doctrine of exhaustion of remedies is a court-created rule that _____.

limits when courts can review administrative decisions

A feature of a horizontal territorial agreement is that it is _____.

made by competing businesses

In the context of the factors that need to be considered when selecting the best organizational form for a business activity, the meaning of the word "continuity" becomes associated with the stability of the organization when one questions the _____.

manner in which the existence of the organization relate to its owners

ABC Co. currently does not operate in Oregon, so it decides to purchase XYZ Co. who does. What is this type of merger called?

market extension-geographic

According to the Securities and Exchange Commission and the courts, the kinds of information that an average prudent investor would want to have so that he or she can make an intelligent, informed decision whether or not to buy a security is described by the term _____.

material

When reviewing the findings of fact made by an administrative agency, a court upholds the agency's findings and conclusions if they are supported by substantial evidence in the record. Here, substantial evidence refers to _____.

material evidence from which a reasonable person might reach the same conclusion as did the agency

A crucial issue with the continuity factor of an organization is the _____.

method by which the business organization can be dissolved

Which of the following statements is correct regarding monopolies?

monopolies are only illegal if predatory

Which one of the following is a Disdavantage of a LLC (according to your Power Point Lecture)?

no disdavantages (cons)

A court is reviewing the findings of fact made by an administrative agency by analyzing a record of the agency's proceedings. If substantial evidence in support of the agency's decision is present, the court will _____.

not disturb the agency's findings

The general counsel of a U.S. administrative agency is _____.

often as powerful as a commissioner or board member

In the context of the use of materiality as a defense to avoid civil liability under the Securities Act of 1933, determining whether or not a particular fact is material depends on the _____.

parties involved

An agreement between two or more persons to share a common interest in a commercial endeavor and to share profits and losses is known as a(n)

partnership

In the context of the functions of the quasi-judicial staff of a U.S. administrative agency, the role of an administrative law judge is to _____.

perform the adjudicative fact-finding function

According to your Areas of Emphasis Sheet, ______ happens when a corporation fails to file board of director meeting minutes with the Secretary of State's Office OR even meet and the corporation loses it's limited liability.

piercing the corporate veil

What is the name of the period in which contracts to buy and sell securities are finalized is called?

posteffective period

The primary function of the Federal Trade Commission (FTC) is to _____.

prevent illegal business practices

Which of the following is accurate regarding Price Fixing (in general, see Concept Summary in your textbook)?

price fixing does NOT apply to professionals and service providers

A doctrine similar to exhaustion of remedies is known as:

primary jurisdiction

The goal of the antitrust laws is to _____.

promote workable competition and all the benefits that are intended to flow from it

Section 12 of the Securities Act of 1933 relates to _____.

prospectuses and other communications

Which one of the following is NOT a reason for governmental agencies?

provide administration

According to your Power Point Lecture, a business (Delta, Home Depot) whose stock IS acquired through an exchange (NASDAQ, NYSE) is

publicly held

The ability of an agency create policies (see your Power Point Lecture) is called ______ power.

quasi legislative

When one party offers to buy the other's goods but only if the second party buys other goods from the first party, the illegal arrangement under Clayton is called?

reciprocal dealings

The Securities Act of 1933?

regulates the initial sale of securities to the public

Section 2 of the Sherman Act establishes _____.

regulations that break up existing monopolies and prevent others from developing

According to your sidebar 15.6 in your textbook, issues ______ are illustrated by the: 1. government having difficulty in hiring and retaining the best-qualified people 2. the reward system failing to make a significant distinction between excellent, mediocre, and poor performances. 3. difficulty in discharging unsatisfactory employees

relating to personnel

When a buyer agrees to purchase all of its needs of a given contract from the seller during a certain period of time, this illegal arrangement under Clayton is called?

requirements contract

Attempts by manufacturers to control the ultimate retail price for their products is known as______ ________ ________ .

resale price maintenance

Any time an employee is liable for tortious acts in the scope of employment, the employer is also liable. This is because of the tort doctrine of _____.

respondeat superior

A feature of the shareholders of S corporations is that they are _____.

responsible for accounting on their individual income tax returns for their share of their organization's profits or losses

The secretary of a U.S. administrative agency is an individual who is _____.

responsible for the minutes of agency meetings

Which one of the following is NOT a type of lawsuit against an agency (see your Power Point Lecture)?

review of adjudications: legislative oversight

According to your Power Point Lecture, what type of case occurs when an agency oversteps its authority by going beyond the intent of Congress when they created the agency (i.e. the FDA vs. Brown & Williamson Tobacco case in your text)?

review of rule making

Organizations that are subject to election made possible through the language of Subchapter S of the Internal Revenue Code are known as .

s corporations

According to the Securities Act of 1933, it is illegal to _____ during the prefiling period of the registration process.

sell a covered security

In the context of the filing of the registration statement with the Securities and Exchange Commission, the Securities Act of 1933 describes:

selling activities permitted at the various stages of the registration process.

The members of the board of directors of a corporation are elected by the _____.

shareholders

A person has standing to sue if he or she _____.

suffers economic loss due to an agency's action

The role of the executive director for administration of a U.S. administrative agency is to _____.

supervise usual administrative functions such as accounting, budgeting, and personnel

Congressional response to the collapse of Enron followed by the even larger accounting fraud and bankruptcy of WorldCom was the passage of _____.

the Sarbanes-Oxley Act of 2002

The state action exemption created by the Supreme Court is based on the reasoning that _____.

the Sherman Act does not apply to state government

In the context of a corporation's liabilities, the corporate veil is said to be pierced when _____.

the corporate entity is disregarded because courts find that the corporate organization is being misused

The delegation of quasi-legislative authority to administrative agencies must be definite, which means that _____.

the delegation must be set forth with sufficient clarity

Match the regulation costs paid by consumers (in the left column) with their descriptions (in the right column). Instructions

the direct cost-It is paid in the form of taxes. the indirect cost-It is paid while purchasing services and products.

In the context of the delegation of quasi-legislative authority to administrative agencies, arbitrary administrative action and administrative abuse of discretionary power are controlled by _____.

the existence of procedural safeguards

When an individual is selecting the best organizational form for his or her business, he or she should consider _____.

the taxation of the organization's earnings

A feature of the advisory councils of a U.S. administrative agency is that _____.

they are interested in the agency's mission

A person who learns of nonpublic information from an insider is known as a(n)

tippee

Which of the following is the reason given in your textbook for the Securities Laws of 1933 and 1934?

to help the United States overcome the great depression of the early 1930s

Solicitations during the waiting period of the securities registration process are made in advertisements called .

tombstone ads

True or false: Administrative agencies, boards, or commissions usually consist of five to seven members, one of whom is appointed as chair.

true

True or false: During the waiting period involved in the securities registration process, solicitations may be made by use of a summary prospectus, a statistical summary, or a preliminary prospectus.

true

True or false: In the context of the sale of securities, the prospectus contains the same essential information that is contained in the registration statement.

true

True or false: The general language used in delegating quasi-legislative authority usually involves grants of substantial discretion to an agency.

true

True or false: The personal liability of the owners should be taken into account when selecting the best form of organization for one's business.

true

According to your areas of empahsis sheet, the ____ managed the trusts and was able to set operations and policies which in fact created monoplostic control of prices in the marketplace.

trustee

A sales contract in which a product is leased or sold only on the condition that the lessee or buyer purchase a different product or service from the seller or lessor is known as a(n) _____.

tying contract

When a seller requries a seller to purchase the entire line of products instead of being able to pick and choose products, the illegal arrangement under Clayton this is known as?

tying contract (full line forcing)

According to your Power Point Lecture, investment bankers or stock brokers who guarantee the initial sale of security are called?

underwriters

Persons who serve as the advisory councils of a U.S. administrative agency are _____.

usually selected because of their expertise

Perdue Chicken (manufacturer) tries to control the price that Zaxby's (retailer) can charge for a Chicken Finger plate. This situtaiton would be an example of?

vertical price fixing

Agreements that are made by vertical business competitors are termed

vertical restraint

Agreements that are made by vertical business competitors are termed .

vertical restraint

In the context of government control over administrative processes, the executive branch has:

veto power over the statutes of the legislature.

The factor of control in a business organization concerns _____.

who is managing the organization

To establish a violation of Section 2 of the Sherman Act, a plaintiff must prove that the defendant _____.

willfully acquired or maintained monopoly power

Identify a true statement about the continuity of a partnership.

A change in the partners at any time results in the dissolution of the organization.

Which of the following is included in the registration statement filed with the Securities and Exchange Commission?

A detailed disclosure of financial information about the issuer and the controlling individuals involved in the offering of securities for sale

Match the types of mergers (in the left column) with their descriptions (in the right column). Instructions

A market extension merger-It refers to an acquisition in which the acquiring company extends its markets. A conglomerate merger-It is a merger in which the businesses involved neither compete nor are related as customer and supplier in any given line of commerce.

Which of the following are true according to Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934? (Check all that apply.)

A plaintiff in a suit must prove damages. A buyer must allege specific damages due to the seller's fraud.

Match the types of business dealings (in the left column) with their examples (in the right column). Instructions

A reciprocal dealing-Barry's Farm, a supplier of milk and other dairy products, proposes to buy dairy products from Healthz Corp., a manufacturer of dairy products, if the latter agrees to buy milk from Barry's. An exclusive dealing-Jill, an orchardist, agrees to supply fruits only to Twangs Corp., a manufacturer of processed fruit products.

Match the types of business dealings (in the left column) with their descriptions (in the right column). Instructions

A reciprocal dealing-This arrangement exists when two parties face each other as both buyer and seller. An exclusive dealing-This contract contains a provision that one party or the other (buyer or seller) will deal only with the other party.

In the context of tying contracts, identify a true statement about full-line forcing.

A seller compels a lessee to take a complete product series from the seller.

Identify the true statements about a tippee. (Check all that apply.)

A tippee is liable for passing on nonpublic information. A tippee is viewed as a temporary insider.

Joel, a manager at a retail store, buys new stock from a wholesale dealer and uses an oral consent from his employer to charge the expenses to his company's account with the dealer. Identify the form of contractual authority held by Joel in this scenario.

Actual authority

In the context of the test of reasonableness, match the types of agreements (in the left column) with their characteristics (in the right column). Instructions

An agreement promoting competition-It may be legal. An agreement destroying or suppressing competition-It is unreasonable and illegal.

In the context of an employer's tort liability from the actions of agents, identify the true statements about respondeat superior cases. (Check all that apply.)

An employer who must pay for an employee's tort under respondeat superior may legally sue the employee for reimbursement. Frolic and detour is a valid defense to the strict liability of respondeat superior.

Identify a true statement about a U.S. administrative agency.

Appointments at the federal level require Senate confirmation.

Which one of the following was passed in response to the banking and mortgage crisis of 2008?

Dodd Frank Wall Street Reform and Consumer Protection Act

Which one of the folliwng is the Federal Agency which to prevent discrimination in employment based on race, color, religion, sex, or national origin and other unlawful employment practices? (Hint: see Sidebar 15.1 in your textbook)

EEOC

Identify the techniques used by corporations to avoid the double taxation of corporate income.

Electing to file under Subchapter S of the Internal Revenue Code Providing expense accounts for employees to purchase travel, food, and entertainment

When can a registration statement of securities lead to the imposition of civil liability on individuals under Section 11 of the Securities Act of 1933? (Check all that apply.)

If it omits material facts required by statute or regulation If it contains untrue statements of material facts

Which of the following is true of a corporation?

If it wishes to conduct business in states other than the state of incorporation, it must be licensed in these foreign states.

Identify a true statement about the factors that influence the decisions of administrative agencies.

Interested parties are allowed to present evidence in support of, or in opposition to, a proposed rule at public hearings.

According to your textbook, which one of the following IS a question the court will ask when determining if something is a security?

Is the investment a common business activity?

Identify the attributes of the Securities and Exchange Commission.

It administers the federal securities laws. It consists of five commissioners appointed by the president for five-year terms. It employs staff personnel such as accountants, security analysts, lawyers, and others.