1.
Central Brokerage Associates sells securities. The definition of a security does not include, as an element,
Answer

a.an investment

b.a common enterprise

c.a reasonable expectation of profits

d.profits derived entirely from the efforts of the investors
2
Frank, an officer of Gamma, Inc. learns that Gamma has developed a new source of energy. Frank tells Gail, an outsider. They each buy Gamma stock. When the development is announced, the stock price increases and they each immediately sell their stock. Subject to liability for insider trading is:
Answer

a.Frank and Gail.

b.Frank only.

c.Gail only.

d.neither Frank nor Gail.
3
Dave and Earl decide to open a restaurant and operate the business as a corporation. At the directors’ initial meeting, the directors may
Answer

a.adopt articles of incorporation only.

b.adopt bylaws only.

c.choose a corporate name only.

d.adopt articles of incorporation and bylaws and choose a corporate name.
4
The four shareholders of Delta, Inc., want to prevent each other from selling the shares to third parties without first being given the opportunity to buy them. The shareholders can provide for this in
Answer

a.a buy-sell agreement that includes a "take-along" clause.

b.a buy-sell agreement that includes a right of first refusal.

c.a key-person clause that specifies who can sell what to whom.

d.none of the above.
5
The U.S. Fish and Wildlife Service orders Ed to stop using a certain type of fishing net from his boat. To appeal this order to a court, Ed must
Answer

a.appeal simultaneously to the agency and the court.

b.bypass all administrative remedies and appeal directly to the court.

c.exhaust all administrative remedies.

d.ignore the agency and continue using the net.
6
Mary is an administrative law judge (ALJ) for the National Labor Relations Board. In hearing a case, Mary has the authority to make
Answer

a.decisions binding on the federal courts.

b.determinations of fact.

c.new statutory laws.

d.new rules and regulations.
7
Best Toy Company begins marketing a new toy that is highly flammable. The Consumer Product Safety Commission may
Answer

a.ban the toy’s future manufacture and sale, and order that the toy be removed from the market.

b.ban the toy’s future manufacture and sale only.

c.do nothing until there is an injury or damage on which to base an action.

d.order that the toy be removed from the market only.
8
Gamma Company owns a hazardous waste disposal site that it sells to Omega Properties, Inc. Later, the EPA discovers a leak at the site and cleans it up. The EPA can recover the cost from
Answer

a.Gamma only.

b.Gamma or Omega.

c.neither Gamma nor Omega.

d.Omega only.
9
Tech, Inc., sells its brand-name computer equipment directly to its franchised retailers. Depending on how existing franchisees do, Tech may limit the number of franchisees in a given area to reduce intrabrand competition. Tech’s restriction on the number of dealers is
Answer

a.a per se violation of the Sherman Act.

b.exempt from the antitrust laws.

c.subject to continuing review by the appropriate federal agency.

d.subject to the rule of reason.
10
Handy Tools, Inc., charges Irma’s Home Store five cents per item and Jack’s Hardware ten cents per item for the same product. The two stores are competitors. If this substantially lessens competition, it constitutes
Answer

a.a market division.

b.an exclusionary practice.

c.a trying arrangement.

d.price discrimination.

I’m quite sure that your teacher would be disappointed to learn that you are too lazy to read the text book wherein the answers to these questions lie.

This is a matter of vocabulary, pathetic.

Good luck skating through your future.
Es