1. The person empowered by the corporation to receive notice…

1. The person empowered by the corporation to receive notice of lawsuits against it, is called the:

Incorporator.

Promoter.

Registered agent.

President.
2. Under Rule l0b-5, an insider with material nonpublic information usually:

May sue the corporation to make a profit by buying or selling that company’s stock.

Must disclose the information.

Must either abstain from trading in that company's stock or disclose the information to the person she is trading with.

Must abstain from trading in any and all stock.
3. Which of the following is not one of the three main branches of the U.S. Government?

Executive.

Administrative.

Judicial.

Legislative.
4. Digital Company plans to consolidate with Software Corporation to form DS, Inc. This requires the approval of

neither their boards of directors nor their shareholders.

their boards and their shareholders.

their boards only.

their shareholders only.
5. Lee and Mary want Nick to replace Lee as a party to their contract. They can best accomplish this by agreeing to

an accord and satisfaction.

an assignment.

a novation.

a nullification.
6. "Cyber" crimes today encompass:

a. Identity theft

b. "Cyber stalking"

c. "Hacking" and "spamming"

d. All of the above.
7. X offers to sell Y a computer. Y sends an acceptance via the mail. This acceptance is generally effective when it is

in transit.

received.

sent or dispatched.

written.
8. Which of the following is a false statement?

An administrative law judge (ALJ) in the U.S. rules only on questions of fact, and not questions of law since an ALJ is not a federal district court judge.

Administrative agencies in the U.S. can obtain information through on-site searches and inspections of businesses.

Administrative agency inspectors ordinarily are required to have a warrant in the U.S. before searching a business but the warrant can be an administrative warrant.

Administrative agencies may be required to demonstrate before a court that the information they are seeking or requesting during the course of an investigation is relevant and pertinent to the matter investigated and within the agency’s jurisdiction.
9. Which of the following is not one of the general categories of torts?

Strict liability.

Criminal.

Negligence.

Intentional.
10. A plaintiff in a fraud case must prove the following except:

Justifiable Reliance.

False statement of a material fact.

Intent to Deceive.

Discovery of the falsehood within a reasonable time.
11. Which of the following would not be a typical item of business at the organizational meeting of a corporation?

Adoption of bylaws.

Election of corporate officers.

Selection of promoters.

Authorizing the issuance of shares of stock.
12. Alpha Corporation and Beta, Inc., form a joint venture to develop and market molecular-based computer chips. A joint venture is similar to

a corporation.

a partnership.

a sole proprietorship.

a syndicate.
13. Which of the following situations, by itself, typically would not justify a court disregarding the corporate entity?

The corporation failed to follow the necessary corporate formalities.

The corporation is severely undercapitalized.

The corporation does not have enough current assets to pay all its liabilities.

The shareholders have looted the corporation.
14. Which of the following is not one of the functions of the SEC?


Adopting rules to further the functions or purposes of the securities laws.

Providing government-backed insurance to purchasers of all securities.

Investigating securities violations.

Bringing enforcement actions against suspected violators of securities laws.
15. The purpose of a proxy is to:

Allow a shareholder to transfer shares to another.

Allow a shareholder to place shares in trust.

Allow a shareholder to assign her right to vote to another.

Allow a shareholder to assign her dividends to another.