Legal & Social Environment of Business Exam 3
To meet the standard for the duty of care, a person must: 1 act in good faith and with the judgment of an ordinarily prudent person. 2 act in good faith and with the judgment of a highly skilled person. 3 act in good faith and without a mistake. 4 be faithful to the corporation.
1
The Board of Directors may conduct business: (Choose 2 answer choices) 1 at regular meetings. 2 at special meetings. 3 at any time. 4 privately and outside of meetings called by the corporation.
12
Noncompliance with federal securities laws may subject an individual or a company to which of the following penalties? Choose 3 answers. 1 disgorgement of profits 2 imprisonment 3 civil fines per act or omission 4 "blue sky law" fines
123
What categories are protected by the Equal Employment Opportunity Commission (EEOC)? Choose 3 answers. 1 genetic information 2 gender identity 3 national origin 4 education level
123
Which posters does the Occupational Safety and Health Act (OSHA) require most businesses to display? Choose 3 answers. 1 the "Job Safety and Health Protection" poster 2 the "Fair Labor Standards Act" poster 3 the "Family and Medical Leave Act" poster 4 the "Fire Escape Routes" poster
123
If an employee has proven an unfair pay disparity between males and females, what defenses may the employer use? Choose 3 answers. 1 The pay disparity is based on merit or output. 2 The pay disparity is based on seniority, not gender. 3 The pay disparity is based on the greater family responsibility borne by women. 4 The pay disparity is based on any factor other than gender.
124
What will terminate an agency relationship? Choose 3 answers. 1 achievement of the purpose of the agency 2 passage of one year, as agency agreements must be updated annually 3 mutual agreement between agent and principal 4 lapse of a pre-specified time
134
Any person who knowingly fails to include a material fact on a registration statement can be held liable under: 1 no section of the Securities Act of 1933. 2 Section 11 of the Securities Act of 1933. 3 Section 20A of the Securities 4 Exchange Act of 1934. Section 12(a)(2) of the Securities Act of 1933.
2
Where should Articles of Incorporation be filed? 1 With the federal government 2 With the county recorder's office 3 With the state 4 Articles of Incorporation are not filed.
3
An operating agreement for a limited liability company: 1 must be in writing and signed by all the officers of the company. 2 is required for the operation of a limited liability company. 3 may not specify how profits are divided. 4 typically includes provisions about choosing the LLC's management.
4
How does a principal become liable to third parties on contracts? 1 The principal directly signs a contract with a third party. 2 A principal is not liable to third parties on contracts. 3 The agent ratifies the contract. 4 The principal's agent has the authority to bind the principal in a contract with a third party.
4
Which of the following statements is a provision of the Federal Labor Standards Act (FLSA)? 1 Companies with 20 or more hourly employees must use time clocks to standardize recordkeeping. 2 Child labor restrictions apply only to workers under the age of 16. 3 All workers must be paid at least the federal minimum wage. 4 Under the FLSA, any employee who works more than 40 hours per week must be paid no less than 1.5 times regular pay for all hours worked over 40.
4
Which statement is true about creating a sole proprietorship? 1 The members of a sole proprietorship must write and sign an operating agreement. 2 The owner of a sole proprietorship must file an official record of the business name with the secretary of state's office. 3 There is a waiting period of 30 days between opening the business and the time a sole proprietorship becomes official. 4 No documentation is required to create a sole proprietorship.
4
Officials from Vital Corporation are traveling around the country making presentations to prospective investors. The officials are conducting a a) road show. b) secondary offering. c) private offering. d) prospectus.
A
The term "S Corporation" comes from a) the Internal Revenue Code. b) state corporation law. c) the FTC rules. d) the Securities and Exchange Commission.
A
Which of the following is the most appropriate term to use when describing management's duty to its shareholders? a) fiduciary duty b) legal duty c) official duty d) statutory duty
A
Which of the following laws provides support to unemployed workers? a) FLSA b) FUTA c) NLRA d) OSHA
B
When a stock underwriter acts as the company's agent in selling stock, it is called a a) firm commitment underwriting. b) company underwriting. c) best efforts underwriting. d) express underwriting.
C
T/F In order to be considered sexual harassment, behavior must be so severe that it interferes with an employee's ability to work.
T
T/F Premier Enterprises sold Watson unregistered stock which was not exempt. The 1933 Act imposes liability on Premier, and Watson can demand rescission if he still owns the stock.
T
T/F Sara decided to incorporate her business under the name Gomo, Inc. Before Gomo was incorporated, Sara signed a contract in the name of Gomo, Inc. to lease a store front. Sara did not tell the other party that Gomo was not yet formed. Sara is personally liable on the lease.
T
T/F Securities issued by banks are exempt from SEC registration.
T
A written agreement outlining the roles of partners, their rights, and their duties are called: 1 a partnership agreement. 2 Articles of Organization. 3 Operating agreements. 4 Articles of Incorporation.
1
May the government terminate a government employee who speaks out against policies and procedures? 1 No, if the matter is one of public concern. 2 Yes, because the government has a special interest in maintaining order. 3 Yes, because any employee can be fired for any reason. 4 No, all speech is protected by the U.S. Constitution.
1
When securities are being offered by a company only to residents of the state in which the company has its principal place of business, the securities may be exempted from registration under: 1 SEC Rule 147. 2 Regulation D, Rule 506. 3 Regulation A. 4 Regulation D, Rule 504.
1
Which of the following does the SEC evaluate in a registration statement? 1 Whether appropriate disclosures have been made 2 The likelihood of financial return for investors 3 The quality of the security 4 The level of financial risk to investors
1
Which of the following is a requirement for the initial formation of a corporation? 1 a charter 2 a minute book 3 an initial stock offering 4 a board of directors
1
During the registration waiting period, an issuer may: (Choose 2 answer choices) 1 offer to sell securities. 2 distribute a preliminary prospectus. 3 sell securities. 4 distribute a final prospectus.
12
A foreign corporation is: 1 one that it privately held. 2 one that was incorporated in two or more different states. 3 one that was incorporated outside of the United States. 4 one that was incorporated in a different state.
4
A shareholder has the right to inspect the corporate books, if done: 1 for any purpose. 2 to provide a competitor with an advantage. 3 to determine voting alliances. 4 in good faith and for a proper purpose.
4
Jim agreed to show Donna's car to a potential buyer. Donna was not able to be home since she had to attend a meeting. After showing the car, Jim left the keys in it and the car was stolen. Which statement is correct? a) Since Jim is a gratuitous agent, he will only be liable for the loss of the car if his conduct constitutes gross negligence. b) Since Jim is a gratuitous agent, he will be liable for the loss of the car if his conduct constitutes ordinary negligence. c) Since Jim is a gratuitous agent, he has no liability for the car. d) Since Jim is a gratuitous agent, he is strictly liable for the loss of the car.
A
At what stage are the partnership debts paid and the proceeds distributed to the partners? a) during dissociation b) during winding up c) during termination d) during dissolution
B
In the late 1960s, a shareholder of the company that owned the Chicago Cubs baseball team sued the company because the directors refused to install lights in Wrigley Field. The court decided that the directors a) had the right to make decisions for the team without any concern for the desires of the shareholders. b) had a rational purpose for not installing lights and were not liable for doing anything improper. c) were not protected by the business judgment rule. d) had not acted with any rational purpose and were liable to its shareholders for damages caused by their actions.
B
Jill owns a retail business by herself and was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability? a) Jill can only be liable up to the amount she initially invested in the business. b) Jill can be held personally liable to the customer since she is the owner. c) Jill has no potential liability to the customer. d) Jill cannot be held personally responsible; the woman's insurance must pay for the claim.
B
Laurie is incorporating her business. Laurie's home state is Wisconsin. Business will be conducted in California, Michigan, Pennsylvania, and Virginia. Laurie a) must incorporate the business in Wisconsin, California, Michigan, Pennsylvania, and Virginia. b) can incorporate the business in any state. c) must incorporate the business in Wisconsin, the home state. d) must incorporate in Delaware.
B
The Age Discrimination in Employment Act protects persons a) between 30 and 65 years of age. b) age 40 and older. c) between 45 and 70 years of age. d) age 70 and older.
B
Under the 1934 Act, an issuer must register with the SEC if a) its securities are not going to be traded on a national exchange. b) it has at least 2,000 shareholders and total assets that exceed $10 million. c) it will not be providing investors with a prospectus. d) it has not completed a public offering under the 1933 Act.
B
Which of the following is a duty of a principal to an agent? a) The duty of loyalty. b) The duty to indemnify for reasonable expenses. c) The duty to provide information. d) All of these are correct.
B
Which of the following workers is entitled to unpaid leave under the Family and Medical Leave Act? a) Stanley, who works part time for a small coffee shop with 10 employees. b) Marianne, who has worked full time for five years with Microsoft. c) Dakota, who works part time for Delta Air Lines. d) All of these are correct.
B
An employer may be liable for an employee's sexual harassment if a) the supervisor scheduled the plaintiff and defendant to work together. b) the defendant showed signs of being distraught over the harassment. c) the plaintiff suffered a "tangible employment action" such as firing or demotion. d) All of these are correct.
C
Art and Alma made capital contributions of 60% and 40% respectively to their newly formed partnership, AA & Associates. They did not have a written partnership agreement. At the end of the first year, the partnership made a profit of which Alma now claims half. However, Art maintains he should receive 60%. Who is correct? a) Alma, because she works in the business. b) Art, since it would only be fair. c) Alma, as the UPA provides that profits are split equally unless the partners agree otherwise. d) Art, since the UPA presumes that profits and losses are divided in proportion to capital contribution.
C
Mark was refused employment at a Christian bookstore because he was not a "born-again Christian." If Mark brings a Title VII action against the bookstore, the bookstore's best defense would be a) it could not reasonably accommodate Mark. b) it did not discriminate against a protected category. c) Title VII doesn't apply to private businesses. d) being a "born-again Christian" is a bona fide occupational qualification.
D
The phrase "piercing the company veil" applies to which type of organization? a) a general partnership b) a close corporation c) an S corporation d) a limited liability company
D
T/F A business corporation can be incorporated under either state law or federal law.
F
T/F Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to Rob.
F
T/F The "business judgment rule" has been replaced by "good faith statutes" in most states.
F
T/F The "tipper" of inside information can be convicted of a crime, but the "tippee" cannot.
F
T/F Title VII of the Civil Rights Act of 1964 applies to employers with any number of employees, making it illegal to discriminate on the basis of race, color, religion, sex, or national origin.
F
T/F Generally speaking, an employer does not have to give workers a day off on their religious Sabbath if doing so would cause an undue hardship for the employer.
T
T/F Generally, a joint venture is a partnership created for one limited purpose
T
T/F If a person accepts the benefits of an unauthorized transaction, or fails to repudiate it, then he is bound by the act as if he had originally authorized it.
T
T/F In the absence of a specific law to the contrary, employers have the right to fire workers for off-duty conduct.
T
T/F Larry decided to relocate to Germany. Larry hired Happy Homes, Inc. to find a buyer and contract for the sale of his house in the United States. The agency relationship between Larry and Happy Homes must be evidenced with a written agreement.
T
T/F Securities offered and sold entirely within one state by a corporation of that state are exempt from registration.
T
T/F Wrongful discharge in essence, is the public policy rule that prohibits an employer from firing a worker for reasons which would violate fundamental social rights, duties, or responsibilities.
T
Which of the following are among the five periods identified by the Securities and Exchange Commission (SEC) rules in the registration process? Choose 2 answers. 1 a waiting period 2 a pre-filing period 3 a prospectus period 4 a selling period
12
A worker's status as an employee or independent contractor affects: (Choose 3 answers.) 1 ownership of work created on the job. 2 the business' taxes. 3 the business' liability for the worker's actions. 4 whether the job is full time or part time.
123
The Equal Pay Act forbids: (Choose 3 answers.) 1 denying an employee insurance or other benefits based on gender. 2 refusing to pay or issue pension benefits due to the employee's gender. 3 paying one gender a different amount for the same work. 4 offering a different starting salary based on any factor other than experience.
123
When is an agent liable on a contract that the agent entered into in the business of the agent's principal? Choose 3 answers. 1 when the agent is acting without authority 2 if the agent entered into the contract in a personal capacity 3 when the principal is undisclosed 4 when the principal is not satisfied with the terms of the contract
123
Which of the following are rights of common shareholders? Choose 3 answers. 1 opportunity to inspect corporate books and records 2 priority for having debts paid from the liquidating company's assets 3 voting on matters such as election of directors and proposals for mergers or liquidation 4 transferable ownership
124
What are the fiduciary duties of an agent to her principal? Choose 3 answers. 1 accounting 2 indemnification 3 loyalty 4 obedience
134
Which of the following workers are generally NOT eligible for workers' compensation? Select 3 answers. 1 Agricultural workers 2 Construction workers 3 Temporary workers 4 Domestic workers
134
The board of directors manages: 1 shareholder proxies. 2 the business and affairs of the corporation. 3 the day-to-day activities of a corporation. 4 employees' daily tasks.
2
Who is liable to third parties for damage caused by an agent's tortious conduct if the principal had directed the agent to take that action? 1 neither the agent nor the principal if the principal has insurance coverage 2 both the agent and the principal 3 only the principal 4 only the agent
2
At the first meeting of corporate shareholders, what business is normally conducted? Select 2 answers. 1 Voting on the business name 2 The adoption of corporate bylaws 3 The election of the board of directors 4 The filing of the articles of incorporation
23
Which of the following provisions are typically in an operating agreement for a limited liability company (LLC)? Choose 2 answers. 1 a record of the company's assets and debts 2 whether the dissociation of a member, such as by death or departure, will trigger dissolution of the LLC 3 how membership interests may be transferred 4 the advertising plan for the company
23
Partners have which of the following duties? Select 3 answers. 1 Litigating on behalf of the partnership 2 Fiduciary duties 3 Capital contribution 4 Record keeping
234
Which of the following should be approved by shareholders? Select 2 answers. 1 A sale of old computers that the company no longer uses 2 An acquisition of the company by another company 3 A change in employee compensation 4 A dissolution of the corporation
24
For what terminations does a principal NOT have a duty to notify third parties? 1 Agencies in which a third party has dealt with the agent 2 Agencies with apparent authority 3 Agencies terminated by operation of law
3
How much time off does the Family and Medical Leave Act (FMLA) provide? 1 up to 12 weeks of paid time off 2 whatever time is needed to take care of the health concern of a protected person 3 up to 12 weeks of unpaid time off 4 up to six weeks of paid and up to six weeks of unpaid time off
3
If an employee reports illegal behavior of a publicly traded company and is later terminated because of it, under Sarbanes-Oxley they may be entitled to: 1 back pay only. 2 Attorney's fees only. 3 reinstatement, back pay, and attorneys' fees. 4 reinstatement only.
3
Is a principal under a duty to compensate an agent who works on the principal's behalf? 1 No, if a salary has not been agreed on. 2 No, an agent is never paid. 3 Yes, if the contract requires compensation. 4 Yes, if the agent does a really good job above and beyond what is expected.
3
Which law specifically allows an employer to require union membership after working a specific period of time? 1 National Labor Relations Act. 2 Labor-Management Reporting and Disclosure Act. 3 Labor-Management Relations Act. 4 Norris-LaGuardia Act.
3
Which of the following scenarios illustrates a business world without agency relationships? 1 Hiring an expert as an employee. 2 Hiring an expert as an independent contractor. 3 The owner prepares the tax returns. 4 A corporation with only one employee.
3
Under the Civil Rights Act of 1964, which of the following are illegal if applied to a member of a protected class? Choose 2 answers. 1 merit system and seniority 2 affirmative action and quotas 3 disparate treatment and disparate impact 4 hostile environment and retaliation
34
An employer reacts to an employee's report of a Title VII violation by cursing and making offensive jokes about that employee and moves the employee to another department. What part of Title VII could apply? Choose 2 answer choices. 1 Disparate impact. 2 Disparate treatment. 3 Hostile work environment. 4 Title VII does not apply to this situation. 5 Retaliation.
35
A corporation that is formed in one state but does business in another state is referred to in the second state as: 1 an alien corporation. 2 a distant corporation. 3 a domestic corporation. 4 a foreign corporation.
4
What authority is ended with the termination of an agency relationship? 1 All agency authorities 2 Notice authority 3 Apparent authority 4 Actual authority
4
In determining if a partnership exists, the courts will consider all of the following factors EXCEPT a) the nature of the business. b) profit. c) actions of the persons involved. d) management of the business.
A
Alfred has been working for Canyon, Inc. for 12 years, with regular positive performance reviews and promotions. Roger has only been working for Canyon for 3 years. Alfred also has more management qualifications. Yet when a management position is open, Alfred's supervisor advises that Alfred should NOT be promoted to that position. His reason is that he has recently learned that Alfred regularly attends a Narcotics Anonymous support group. Although Alfred has been clean for 16 years, there is fear that he could relapse. What is true? a) Canyon's behavior is not prohibited by the Americans with Disabilities Act, but it is prohibited by Title VII of the Civil Rights Act. b) Although Canyon's behavior is unethical, it is not prohibited. c) Canyon is allowed to make past drug abuse a barrier to management positions. d) Canyon's behavior is prohibited by the Americans with Disabilities Act.
D
A sole proprietorship differs from a corporation in: 1 how stock is sold. 2 the ability to earn a profit. 3 where in the United States they may be located. 4 the ability to be an educational organization.
1
Officers and directors owe which of the following duties to the corporation? Choose 2 answer choices. 1 Duty of Care 2 Duty of Loyalty 3 Duty of Compensation 4 Duty of Good Decisions
12
The role of the Equal Employment Opportunity Commission (EEOC) is to: (Choose 3 answers.) 1 fairly and accurately assess the allegations in a charge of discrimination and make a finding. 2 file a lawsuit to protect the rights of individuals and the interests of the public. 3 set salaries for upper-level management of large companies. 4 investigate charges of discrimination against employers.
124
What are three ways that state workers' compensation claims are funded? Choose 3 answers. 1 Employers pay into a privately-run insurance plan, and claims are paid by the insurance. 2 Employers are self-insured and pay claims out of company funds. 3 Employees purchase an optional injury insurance plan through the company and claims are paid through that insurance. 4 Employers pay into a state-run insurance plan, and claims are paid by the insurance.
124
In addition to describing the securities being offered for sale, a registration statement must meet which of the following requirements? Choose 3 answers. 1 It must state how the corporation intends to use the proceeds from the sale of its securities. 2 It must be mailed to all investors. 3 It must be filed with the Security and Exchange Commission (SEC) online. 4 It must contain specific information about the company's management, assets, liabilities, and risk factors.
134
Any security must be registered before it can be sold, unless: (Choose 2 answer choices) 1 the security qualifies for an exemption. 2 the issuer selling the security maintains certain transaction records. 3 the security is unlikely to result in financial harm. 4 the transaction qualifies for an exemption.
14
What are the best remedies for wrongful termination in the case of someone who found another job three months after being fired? Choose 2 answer choices. 1 Criminal charges. 2 Lost benefits. 3 Reinstatement. 4 Lost wages.
24
What is the term for the act of terminating an agency relationship? Choose 2 answers. 1 renunciation, if done by the principal 2 renunciation, if done by the agent 3 revocation, if done by the agent 4 revocation, if done by the principal
24
Which of the following is a requirement for the formation of a limited liability company (LLC)? 1 an operating agreement 2 articles (or certificate) of organization 3 at least three members 4 an initial stock offering
2
Which amendments to the U.S. Constitution are the primary source of equal protection provisions in employment law? Choose 2 answers. 1 the Eighth Amendment 2 the Fourteenth Amendment 3 the Fifth Amendment 4 the Second Amendment
23
The Equal Protection Clause applies to which parties? 1 All parties, whether employers or otherwise. 2 Private employers. 3 All employers. 4 Governmental employers.
4
The formation of LLCs is governed by: 1 the laws of the state in which the LLC is created. 2 the ULLCA. 3 federal statute. 4 private agreements.
1
The simplest form of business to establish is a: 1 sole proprietorship. 2 limited liability company. 3 corporation. 4 partnership.
1
What documents spell out the powers of a corporation? Choose 2 answers. 1 the bylaws 2 the charter (also called the articles of incorporation) 3 de facto documentation 4 certificate of corporate power
12
Which of the following is required in the Articles of Organization for an LLC? Select 2 answers. 1 The name of the business 2 The principal place of business 3 The agent's name and address 4 The attorney's name and address
12
To prove a case of disparate treatment, a plaintiff must show: (Select three) 1 there is an inference of intentional discriminatory conduct. 2 she belongs to a protected class. 3 there is no legitimate nondiscriminatory reason for the conduct. 4 she suffered adverse employment action.
124
Which of the following is included in the definition of a security under the Securities Act of 1933? Choose 3 answers. 1 publicly traded stocks and bonds 2 an interest in real estate 3 an investment contract that meets the Howey test 4 stock options, puts, and calls
134
What are the two types of actual authority? Choose 2 answer choices. 1 Implied authority 2 Apparent authority 3 Fiduciary relationship authority 4 Express authority
14
Which of the following provisions are typically in a charter for a corporation? Choose 2 answers. 1 the intended business purpose of the corporation 2 the trade secrets of the corporation 3 the advertising plan for the corporation 4 the name and address of the corporation's agent
14
Which of the following is one of the elements of liability under Section 10(b) of the Securities Exchange Act of 1934? 1 Falsification of a registration statement 2 Failure to certify a financial document 3 Use of the mail or facilities of interstate commerce 4 Oral communication of a deceptive statement
3
Along with a claim on assets, shareholders may also receive a portion of profits the company pays out in the form of a: 1 reinvestment. 2 proxy. 3 capital gain. 4 dividend.
4
What must a principal do to terminate an agency at will? 1 Get a court order to terminate the agency. 2 Give express written notification to the agent. 3 Pay a severance payment to the agent. 4 Simply notify the agent of the termination.
4
a principal liable for the tortious actions of the principal's agent? 1 Yes, but only if the principal authorized the tortious conduct. 2 No, unless the principal authorized the tortious conduct. 3 No, only the agent is liable for the agent's torts. 4 Yes, but the agent must reimburse the principal.
4
A sole proprietorship differs from a partnership in: 1 the number of owners. 2 how stock is sold. 3 documentation required for formation. 4 liability for debt.
1
Most limited liability company (LLC) statutes provide that unless the articles of organization specify otherwise, an LLC is assumed to be managed by: 1 its members. 2 a board of six members and six non-member managers. 3 one manager. 4 a board of nine managers.
1
A state passes a law requiring all police officers to be of a certain height. Some women challenge the law under the Equal Protection Clause because the average height of women is shorter than that of men. What standard would the court use to make a decision? 1 The Equal Protection Clause does not apply to this employer. 2 Strict scrutiny. 3 Rational basis test. 4 Intermediate scrutiny.
4
If harm is done by an agent, and it is discovered that this agent has been convicted of the same harm before at a previous job, what might a principal be liable for? 1 breach of fiduciary duty 2 negligent retention 3 gratuitous hiring 4 negligent hiring
4
The 1935 act that protects workers' rights to form and join unions for collective bargaining is called the: 1 National Unions Act (NUA). 2 Collective Bargaining Power Act (CBPA). 3 Better Together Act (BTA). 4 National Labor Relations Act (NLRA).
4
Which of the following is a duty of both corporate directors and corporate officers? 1 purchasing stock in the company 2 limiting political endorsements to only candidates that the corporation supports 3 working at least forty hours per week for the corporation 4 making a full disclosure of potential conflicts of interest
4
Who can terminate an agency relationship? 1 Only the agent may terminate. 2 Neither may terminate the agency until the terms of the agreement have transpired. 3 Only the principal may terminate. 4 Either the agent or the principal may terminate.
4
Jessica was a former employee of Mark. When potential employers called Mark for a reference about Jessica, he stated she was not a very good worker and had been fired for excessive absences. He said he had reason to believe Jessica was on drugs, but he wasn't absolutely certain. Jessica learned what Mark was saying and sued him. In most states a) under the qualified privilege rule, it was legal for Mark to say what he said if it was true and Mark was not motivated by ill will. b) though it was proper for Mark to talk about Jessica's work-related history, he should have refrained from talking about her potential drug use. c) it was not proper for Mark to say what he said, since courts have consistently ruled that former employers should not give references over the telephone or in writing without the former employee's written authorization. d) it was legal for Mark to say what he said, since courts have consistently ruled that former employers are immune from lawsuits for giving references.
A
If a court determines that a manager's corporate decision amounted to self-dealing, a) the manager is automatically personally liable to the corporation. b) the manager will automatically be fired. c) the business judgment rule will not apply. d) the transaction being challenged will be automatically voided.
C
In some states, an employer can discipline or fire employees for a) smoking cigarettes, even in the privacy of their own home. b) posting an unflattering comment about the employer on social media. c) dating coworkers, even if the relationship is consensual. d) All of these are correct.
D
Janelle has an art collection that she wants to sell. She calls Amber and tells her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of a) apparent authority. b) intermediary agency. c) respondeat superior. d) express authority.
D
When a principal is partially disclosed a) the agent and principal will be only jointly liable on the contract. b) only the agent is liable. c) only the principal can be liable. d) the agent and principal will be jointly and severally liable on the contract.
D
Which of the following would be a reasonable accommodation under the ADA? a) modifying a job description and job duties to accommodate the disabled worker b) assigning a shadow employee to work with the disabled worker c) creating a new job that the disabled worker can perform d) providing part-time schedules to accommodate the disabled worker
D
Which of the following are qualities of a non-profit corporation? Select 2 answers. 1 It does not provide dividends to shareholders. 2 Its goal is to earn a profit. 3 Its goal is to not earn a profit. 4 It provides minimal dividends to company shareholders.
12
The Securities and Exchange Commission (SEC) was established to perform which of the following functions? Choose 3 answers. 1 protecting investors from fraud and misrepresentation in securities transactions 2 enforcing securities laws 3 regulating efforts to raise capital by public companies, but not private companies 4 regulating the securities market
124
Which class of stockholders typically takes the greatest risk, but also has the greatest chance of financial gains? 1 preferred stock 2 common stock 3 bonds 4 mutual funds
2
Which of the following is required to create a sole proprietorship? 1 Filing Articles of Incorporation with the secretary of state 2 Nothing 3 An intention between two or more people to run a business 4 Filing Articles of Organization with the secretary of state
2
Which of the following is the most important distinction between employee status and independent contractor status? 1 An employee has a high degree of skill and a specialized job. 2 An independent contractor has a company name. 3 An employee uses the employee's own tools for doing his or her work. 4 An independent contractor controls the details of his or her day-to-day work activities.
4
An employer requires a college degree to work in any position in the company. What part of Title VII could apply? 1 Title VII does not apply to this situation. 2 Disparate impact. 3 Retaliation. 4 Hostile work environment. 5 Disparate treatment.
5
Conversion rights a) establish whether shareholders are entitled to dividends. b) are designed to prevent dilution of a shareholder's ownership in the company. c) allow investors to convert to a different class. d) specify the order in which classes of stockholders are paid upon dissolution.
C
Under the Fair Labor Standards Act, which of the following scenarios is legal? a) 14-year-old Luis works full time bagging groceries at a supermarket b) 13-year-old Dianna works five hours per week stocking shelves at a drugstore c) 17-year-old Cole has taken a part-time job as a coal miner working alongside his dad d) 12-year-old Molly works several hours per day on her family's farm picking vegetables
D
The Civil Rights Act of 1964 applies to: 1 companies with 5 or more employees. 2 all companies. 3 companies with 15 or more employees. 4 only companies that hire on a seasonal basis.
3
How do agency relationships affect businesses and the business world? Choose 2 answer choices. 1 Principals are benefited, but agents are not benefited. 2 Agency relationships eliminate legal concerns. 3 Businesses can grow by hiring employees. 4 Workers can specialize and become experts.
34
A debt issued by a company as a negotiable instrument with a term of 9 months or less is a security that is exempt from registration and is called: 1 a short-term offering. 2 short-term private placement. 3 a short-swing trade. 4 short-term commercial paper.
4
A sole proprietorship differs from a limited liability company (LLC) in: 1 ability to earn a profit. 2 how stock is sold. 3 the minimum number of owners. 4 the documentation required for formation.
4
The first step in terminating a corporation is: 1 paying all debts and outstanding taxes. 2 the officers winding up business. 3 closing all bank accounts. 4 the board of directors adopting a resolution to dissolve the corporation.
4
The system in which an employer pays her employees an amount based on how well they do their jobs, regardless of gender, is called: 1 quality control. 2 rewards. 3 seniority. 4 merit.
4
What does the ratification of an agency relationship include? 1 The law creates an agency relationship in the case of an emergency. 2 The principal led a third party to believe someone was an agent. 3 There is an agreement between the principal and the agent. 4 A party affirms the contract another person made with a third party.
4
Which of the following documents spells out the rights and duties of the members of a limited liability company (LLC)? 1 charter 2 certificate of organization 3 bylaws 4 operating agreement
4
If the final registration statement contains a material misstatement or omission, the purchaser of the security can recover damages from a) everyone who signed the registration statement. b) the issuer of the security, but not the company's directors or chief officers. c) the experts who signed the registration statement, but not any other parties. d) the company's directors, but not the chief officers.
A
In many ways, a limited liability company can be thought of as a cross between a) a corporation and a sole proprietorship. b) a joint venture and a partnership. c) a corporation and a franchise. d) a sole proprietorship and a social enterprise.
A
Which of the following issuers must register with the SEC under the Securities Exchange Act of 1934? Choose 2 answer choices. 1 Companies with no shareholders 2 Companies who trade on a national exchange 3 Privately held companies with less than 10 shareholders 4 Companies who complete a public offering
24
Where do the funds to pay out workers' compensation claims come from? 1 Business contributions to a federally held fund 2 Businesses must maintain privately held savings accounts. 3 Business contributions to a state held fund 4 Businesses form alliances and hold funds in joint savings accounts.
3
Which of the following is TRUE in cases based on claims of disparate treatment? a) The defendant must prove that the plaintiff is not qualified for the position. b) The plaintiff must prove that he or she was discriminated against because of his or her education level. c) The plaintiff must prove that the defendant intentionally discriminated. d) The defendant must have made a disparaging remark about the plaintiff.
C
A corporate officer who buys or sells his or her company's stock based on non-public information may be committing which type of securities fraud? 1 Ponzi scheme 2 insider trading 3 misappropriation 4 embezzlement
2
What are the two main benefits of workers' compensation to the injured employee? Choose 2 answers. 1 free safety training courses 2 money to cover wages from missed work time 3 assistance in bringing a lawsuit against the company for the injuries 4 money to help pay medical costs
24
What is the key factor in apparent authority? 1 Apparent authority is dictated by operation of law in case of emergencies. 2 The actions of both the principal and the agent 3 The principal's actions 4 The agent's actions
3
Megan was employed by a large company. Her supervisor told her to falsify government reports. She refused and was fired. She sued for wrongful discharge. Her employer claimed that, since Megan was an at-will employee, she had no legal right to claim the company was liable for damages. Is the employer right? a) Yes. An at-will employee does not have a legal right to claim wrongful discharge of employment. b) Yes. As an employee, Megan owes a duty of loyalty to her employer. If the company was found to have acted illegally by falsifying the reports, it (not Megan) would be liable. c) No. Even though Megan was an at-will employee, such employees may not be fired without just cause. d) No. Though at-will employees do not have extensive rights relative to job security, they may not be legally fired for refusing to perform an illegal act.
D
Under which circumstances would the EEOC consider obesity to be a disability? a) only if it has an underlying physiological cause b) only if the individual is morbidly obese c) if it has an underlying physiological cause and/or if the individual is morbidly obese d) being overweight is not considered a disability under any circumstances
C
The National Labor Relations Board (NLRB) has the authority to: (Choose 3 answers.) 1 investigate employees' charges of unfair labor practices. 2 issue a cease-and-desist order. 3 file complaints against employers in response to charges of unfair labor practices brought by employees. 4 file an appeal in federal court.
123
Disparate impact means: 1 there is a discriminatory motive. 2 the rule on its face is not discriminatory but the outcome is. 3 the rule on its face is discriminatory. 4 the employer was intentionally hiding the discrimination.
2
What does agency by ratification require? Choose 2 answer choices. 1 The principal must have hired the agent before the contract was signed. 2 The principal affirms the agent's entire act, not just a portion. 3 The agent must have followed all of the principal's rules in negotiating and signing the contract. 4 The principal must have the legal capacity to contract.
24
Any partner: 1 is entitled to compensation for their time, skill, and effort. 2 may act as an agent who binds the partnership. 3 may create a business in direct competition with the partnership. 4 may encumber the property of the partnership to satisfy personal debt.
2
Which of the following securities are exempt from registration under the Securities Act of 1933? Choose 3 answers. 1 a corporate promissory note with a term of 9 months or less 2 federal government bonds 3 tax-exempt bonds issued by a charitable organization 4 securities issued by a corporation when the company has issued less than $70 million in securities in the past 12 months
123
The National Labor Relations Board (NLRB) is involved in what union activities? Choose 2 answer choices. 1 Union certification. 2 Mediating the collective bargaining negotiations between employers and employees. 3 Collective bargaining. 4 Certifying right-to-work elections.
13
The formation of a partnership without a partnership agreement requires which of the following? Select 2 answers. 1 Sharing of profits and losses 2 The intent to form a partnership 3 Sharing of management duties 4 Five or more partners
13
How would a customer preference for women attendants in the women's restroom or locker room be judged under employment discrimination? 1 The law does not allow for discrimination defenses for gender. 2 This request would qualify as a business necessity. 3 The gender preference could be a BFOQ. 4 It would not be discriminatory against a protected class.
3
Luther (i.e., principal) and Marcia (i.e., agent) have an agency relationship. Under which circumstances will the relationship end "at will." a) Luther and Marcia made no agreement in advance about the term of the agreement. One afternoon, Marcia is tragically killed in an automobile accident. b) Luther and Marcia agree their agency relationship will last two years. One year into the relationship, they meet for lunch and decide the relationship isn't working and both agree to end it. c) Luther and Marcia made no agreement in advance about the term of the agreement. One day, Luther calls Marcia and tells her he no longer wishes her to be his agent. d) Luther and Marcia agree their agency relationship will last two years. At the end of that time, the agency relationship is terminated.
C
Why are seniority systems beneficial? Choose 2 answer choices. 1 Seniority systems are a defense to employment discrimination. As a result, the employer would have fewer related legal issues. 2 Seniority systems can hold back top performers. 3 Seniority systems encourage employee loyalty to the employer. 4 Seniority systems are more difficult to administer, but they offer more opportunities for hiring employees.
13
The Securities Exchange Act of 1934 controls the public trading of stocks in which of the following ways? Choose 2 answers. 1 by creating the Securities and Exchange Commission (SEC) 2 by requiring private companies with over 200 employees to register their stock 3 by requiring public companies to file one initial disclosure of financial information 4 by requiring annual disclosures of financial information
14
A company handbook states that employees will be given warnings for three instances of arriving late for work, after which they will be fired. An employee is fired after being late for the first time. Which of the exceptions to at-will employment could apply? 1 Statutes. 2 Contractual agreements. 3 Public policy. 4 Tort law.
2
At the federal level, the primary legislation that protects workers from dangerous conditions on the job is: 1 the Social Security Act (SSA). 2 the Occupational Safety and Health Act (OSHA). 3 the Workers' Compensation Act (WCA). 4 the Accidental Injury Compensation Act (AICA).
2
Blue sky laws apply to what type of securities transaction? 1 stocks traded on a national stock exchange 2 state-regulated securities offerings 3 stock offerings that exceed $1,000 per share 4 sales of stocks from fictitious companies
2
Common shareholders have the right to vote on: 1 compensation for the officers. 2 proposals for fundamental changes affecting the company such as mergers or liquidation. 3 price of stock. 4 when to pay dividends.
2
Which of the following securities are exempt from registration because of their type? Choose 2 answer choices. 1 Short-term commercial paper 2 Private offerings under SEC Rule 147 3 Public offerings in the initial public offering of a company 4 Government securities
14
