Corporate Governance and Ethics Exam Review
Course Introduction
This course explores the principles and practices of corporate governance and the role of ethics in business decision-making. Students will examine the structures, processes, and policies that guide how corporations are directed and controlled, emphasizing the responsibilities of boards of directors, managers, and stakeholders. Through case studies and real-world examples, the course highlights ethical challenges and dilemmas in corporate environments, discusses regulatory frameworks and codes of conduct, and analyzes the impact of good governance on organizational performance, accountability, and public trust.
Recommended Textbook
The Legal Environment of Business A Managerial Approach 1st Edition by Sean P. Melvin
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25 Chapters
2000 Verified Questions
2000 Flashcards
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Page 2
Chapter 1: Legal Foundations
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Sample Questions
Q1) A presidential veto may be overridden by a 2/3 majority vote of the Senate.
A)True
B)False
Answer: False
Q2) Measures of judicial action intended to compensate an injured party in a civil law suit are called _______.
Answer: remedies
Q3) Which of the following is not a primary source of law?
A) uniform model law
B) administrative law
C) federal common law
D) state common law
Answer: A
Q4) Freedom of Speech,as defined in the Constitution,is an example of substantive law.
A)True
B)False
Answer: True
Q5) Much of the origins of the law dealt with issues related to _______.
Answer: property ownership
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Chapter 2: Business and the Constitution
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Sample Questions
Q1) Obscenity regulation of commercial speech is subject to the same scrutiny as any other government regulation of commercial speech.
A)True
B)False
Answer: True
Q2) In State Farm Mutual v.Campbell,the court laid out a three part analysis for determining the constitutionality of a statute regulating punitive damages.Which of the following is not one of the three criteria specified by the court?
A) the degree of reprehensibility of the defendant's misconduct
B) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award
C) whether the harm resulted from a criminal act or a civil act
D) the difference between the punitive damages awarded and the civil penalties authorized or imposed in similar or comparable cases
Answer: C
Q3) The government's system of checks and balances is called the _______. Answer: separation of powers
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4
Chapter 3: The American Judicial System,Jurisdiction,and Venue
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80 Flashcards
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Sample Questions
Q1) When an attorney requests a change of venue they are asking:
A) for a different judge due to the assigned judge's potential bias.
B) to move the trial from a state trial court to a federal court in the same state.
C) to move the trial from one state to another due to the potential unfairness of a trial in the first state.
D) to change the charges that the defendant has originally arrested for and is now on trial for
Answer: C
Q2) The "effects test" is utilized:
A) to determine the amount of damages a defendant must pay the plaintiff.
B) by the U.S. Supreme Court to decide whether to accept a case for review.
C) by a federal court to determine whether state precedent should apply to a case they are adjudicating.
D) to establish personal jurisdiction over an out-of-state defendant in certain cases when minimum contacts do not otherwise exist
Answer: D
Q3) A person with an ownership interest in a business venture is called a _______.
Answer: Principal
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Chapter 4: Resolving Disputes: Litigation and Alternative
Dispute Resolution Options
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Sample Questions
Q1) When disputing parties submit blind bids to an automated service stating what they are willing to pay or receive to resolve the dispute and the software evaluates the bids and produces a fair price based on the party's input,the form of ODR being utilized is:
A) online negotiation.
B) online mediation.
C) online arbitration.
D) med-arb
Q2) The Federal Arbitration Act provides four grounds by which a court may set aside the award of an arbitrator.Name them.
Q3) Med-arb is a form of ADR in which both a mediator and an arbitrator work simultaneously with the disputing parties to resolve differences.
A)True
B)False
Q4) While normal arbitration produces an arbiter's decision and the parties are bound by the award,online arbitration produces a decision; however,the award is not binding on the parties.
A)True
B)False
Page 6
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Chapter 5: Business,Societal,and Ethical Contexts of Law
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80 Flashcards
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Sample Questions
Q1) The terms morals and ethics are synonymous.
A)True
B)False
Q2) Religious teachings and ethics are separate and distinct and rarely if ever overlap.
A)True
B)False
Q3) Enron Corporation was a multinational conglomerate with a core business of:
A) oil and gas exploration and production.
B) energy trading.
C) insurance and stock speculation.
D) banking and mortgage lending
Q4) Prioritizing moral values for an organization and ensuring that behaviors are aligned with those values is known as _______.
Q5) "What if everyone took these same actions" is a question sometimes called the: A) universalization approach.
B) utilitarian approach.
C) functionality approach.
D) morality approach
Q6) What is the difference between ethics and morals?
Page 7
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Chapter 6: Overview and Formation of Contracts
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Sample Questions
Q1) Under a bilateral contract,there is no contract until the offeree performs the requested act.
A)True
B)False
Q2) In Lucy v.Zehmer,the two parties were drinking in a bar when Lucy offers to buy Zehmer's farm.After some negotiation a written contract was executed.Zehmer claimed that the whole episode was only a joke and he never intended to sell the farm.The court determined that:
A) since Zehmer claimed to be "high as a Georgia pine" and it was only the liquor talking, there was no contract.
B) since the contract was written without lawyers present, it was likely not really serious so no contract was actually formed.
C) because the terms were fair, the parties are bound by the contract regardless of their intent or capacity.
D) because negotiations and modifications to the written agreement lasted between 30-40 minutes, it appeared that both parties were serious so even if Zehmer had no objective intent to sell the farm he is still bound by his actions and the contract was enforceable
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Chapter 7: Contract Performance: Conditions, Breach, and Remedies
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Sample Questions
Q1) Patios R Us contracts with Karl's Concrete to have 35 yards of concrete delivered to a job site they are working on.Payment is to be made 30 days after delivery.Five days after the concrete is delivered,Patios R Us files for bankruptcy and the filing is accepted by the court.Karl's cannot sue to enforce the contract and receive payment.
A)True
B)False
Q2) Sharon has contracted with Craig to buy Craig's car.She will pay $5,000 in cash and he will provide the title and registration.They agree to meet at 10:00 am on Wednesday to exchange their consideration.Unfortunately,Craig dies Tuesday evening.
A) the contract automatically terminates due to impossibility caused by Craig's death
B) the contract automatically terminates due to impracticability caused by Craig's death
C) the contract is still valid and Craig's heirs must go through with it based on the agreed terms
D) the contract is still enforceable, however, Craig's heirs may renegotiate the terms because they are now the owners of the car
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Page 9
Chapter 8: Contracts for the Sale of Goods
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Sample Questions
Q1) The UCC permits terms to be added into a contract or filled in as gap fillers however,the contract cannot be enforceable unless the parties have agreed to and specified a price in their agreement.
A)True
B)False
Q2) Annie agrees to purchase a television from Huge Buy,a merchant electronics seller.Her agreement is that she will pick the television up on Friday at Huge Buy.On Friday morning Huge Buy calls to verify that the television is marked with her name and is available for pickup.Annie tells them that she can't come until Saturday.Friday evening a huge storm damages the Huge Buy facility caving in the roof and destroying her television.Huge Buy demands payment from Annie claiming that they tendered the goods and if she had picked up the television on Friday as originally agreed there would not have been a loss.Does Annie have to pay? Why or why not.
Q3) Johnson Builders is selling a newly built home to Sheila.JRK Realtors is handling the transaction.This sale is covered under Article 2 of the UCC.
A)True
B)False
Q4) A ________ is one that is regularly engaged in the sale of a particular good.
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Page 10
Chapter 9: Torts and Product Liability
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Sample Questions
Q1) Chelsea's house is for sale and she is selling it through a real estate agent.The house is listed and any licensed agent may show the house by using the special accessible key in a lockbox on the front porch.Stan is a licensed agent and brings Paula into the home to show it for a possible sale while Chelsea is not home.Stan and Paula would be considered:
A) invitees.
B) licensees.
C) trespassers.
D) guests
Q2) Explain what the reasonably prudent person standard is and how it applies to negligence.
Q3) Jessica was caught shoplifting at a department store both by employees who witnessed the act and cameras in the store.The store's management may hold her as long as it takes to get her to confess.
A)True
B)False
Q4) Negligence may result from either an intentional or unintentional act.
A)True
B)False
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Chapter 10: Agency and Employment Relationships
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Sample Questions
Q1) Sanchez borrowed money from Fifth National Bank to buy a car.She defaulted on the loan.Fifth National hired Rex's Recovery Service to repossess the car for a set fee.They were simply told to locate and seize the car.Rex's would be classified as a/an:
A) agent/employee.
B) principal.
C) gratuitous agent.
D) independent contractor
Q2) Actual authority is the authority that the third party may reasonably assume that the agent possesses.
A)True
B)False
Q3) Whether an agency is classified as disclosed,undisclosed or partially disclosed,the principal has the duty to fully perform the contract obligations.
A)True
B)False
Q4) The Restatement (Third)of Agency has been adopted in about half of the states.
A)True
B)False
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Chapter 11: Employment Regulation and Labor Law
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Sample Questions
Q1) Employees making complaints to the Occupational Safety and Health Administration are protected under the Occupational Safety and Health Act's whistle-blowing provisions.
A)True
B)False
Q2) Stella has asked her employer for leave pursuant to the Family Medical Leave Act.What must she evidence to be eligible for leave?
Q3) When an employee suffers a job related injury,the employee always has a choice of suing the employer in court or seeking workers' compensation.
A)True
B)False
Q4) ________ refers to the point at which an employee becomes fully entitled to a benefit.
Q5) If an employee in a unionized company believes that the employer is violating the collective bargaining agreement,he or she may file a ________ and the union will arbitrate the matter on behalf of the employee.
Q6) Explain how the Electronic Communications Privacy Act applies to employee privacy and protections.
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Chapter 12: Employment Discrimination
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Sample Questions
Q1) Disparate impact claims under the Age Discrimination in Employment Act do not require the employer to prove a business necessity in order to defend their actions.
A)True
B)False
Q2) Angel is Hispanic and has applied for a job at Buckets Inc.Buckets Inc.has a workforce that is 45% Hispanic,35% black and 20% white.This closely approximates the available workforce available to Buckets.Angel is turned down for the job and is told that they have too many Hispanics,so he couldn't be hired.He is a victim of:
A) mixed motive discrimination.
B) disparate treatment.
C) affirmative action.
D) disparate impact
Q3) Which of the following inclusions in an employment advertisement would likely not be considered discriminatory?
A) young persons wanted
B) seeking recent college graduates
C) high school graduation required
D) stewardesses needed
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14
Chapter
13:
Choice of Business Entity, Sole Proprietorships, and Partnerships
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Sample Questions
Q1) A "Doing Business As" certificate is also known as a ________ certificate.
Q2) If a sole proprietorship loses money,the principal may deduct the losses from her own personal tax liability if any.
A)True
B)False
Q3) You have just graduated and you want to start your own business.You have a degree in horticulture so you have chosen to open a florist shop and plant nursery.What type of business entity will you choose and explain its benefits and detriments in detail.
Q4) Which of the following does not require a duty of care or good faith to other principals?
A) a sole proprietorship
B) a general partnership
C) a limited partnership
D) a family limited partnership
Q5) General partnerships are not created by filing a form with a government agency. A)True B)False
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Q6) Limited partnerships are required to file a/an ________ return with the IRS each year.
Chapter 14: Limited Liability Partnerships, limited Liability
Companies, and Other Business Arrangements
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Sample Questions
Q1) LLCs are pass-through entities for tax purposes,however; LLPs are taxed at the entity level without tax liability passing to partners other than their personal salary income if any.
A)True
B)False
Q2) LLCs may choose to be taxed as a pass through entity or may elect to be taxed as a corporation.
A)True B)False
Q3) In 1997,the IRS:
A) made LLCs more attractive by eliminating strict operating requirements to qualify as a partnership for tax purposes.
B) made LLCs more attractive by changing the tax structure making LLCs more profitable to operate.
C) made LLCs less attractive by increasing and redefining operating requirements to properly identify LLCs and weed out companies misfiling for tax break purposes.
D) made LLCs less attractive by eliminating taxation at the business level making the LLC similar to the partnership for tax purposes
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Chapter 15: Corporations
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Sample Questions
Q1) (p.Reflective Thinking)The corporation with the most shareholders is the:
A) public corporation.
B) professional corporation.
C) publicly held corporation.
D) nonprofit corporation
Q2) The Revised Model Business Corporation Act provides that a self-dealing transaction is not a breach of the duty of loyalty if a majority of disinterested parties approve the transaction after disclosure of the conflict.
A)True
B)False
Q3) A disadvantage of choosing a publicly held corporate form to operate a business is:
A) the pass through taxation.
B) the unlimited liability of officers and directors.
C) the cost and formalities of setup.
D) the difficulty of raising capital
Q4) A corporation exists as an independent person separate from its principals.
A)True
B)False
Q5) What does it mean when it is said that corporations are double taxed?
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Chapter 16: Regulation of Securities, corporate Governance, and Financial Markets
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Sample Questions
Q1) Issuing securities to the public markets the first time is called an initial public offering.
A)True
B)False
Q2) Penalties for violations of the '33 Act may include each of the following except:
A) civil penalties and fines.
B) revocation of the corporate charter for egregious cases.
C) criminal prosecution and incarceration.
D) revocation of the investment by the investor
Q3) Wayne is the president and CEO of a corporation.He owns 25% or the company's total stock and has been selling large chunks of his holdings over the past three months.If the SEC investigates him for short-swing profits,they would do so under:
A) Regulation D of the '33 Act.
B) Rule 10(b) (5) of the '34 Act.
C) Section 16 of the '34 Act.
D) the Private Securities Litigation Reform Act of 1995
Q4) Any officer,director or shareholder who owns 10% or more of a company's stock is considered an _______.
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Chapter 17: Administrative Law
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Sample Questions
Q1) A group of adversely affected parties want to challenge an agency rule in federal court.What is the process that the judge will use to make his or her decision?
Q2) The ________ gives the president power to appoint officers of the U.S.which includes heads of administrative agencies.
Q3) Most common law that regulated administrative law has been codified in the Administrative Procedures Act.
A)True
B)False
Q4) Proposed agency rules are published in the _____.
Q5) For which of the following is an occupational license issued by an agency not required?
A) lawyers
B) college and university professors
C) hair stylists
D) kindergarten teachers
Q6) Describe the probable cause standard used for administrative warrants.
Q7) The Sunshine Act requires that consultation meetings are open to the public.
A)True
B)False
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Chapter 18: Environmental Law
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Sample Questions
Q1) What legislation amended the Comprehensive Environmental Response Compensation and Liability Act (CERCLA)?
A) Revised Environmental Response Compensation and Liability Act (RERCLA)
B) National Environmental Policy Act (NEPA)
C) Superfund Amendments and Reauthorization Act (SARA)
D) Resource Conservation and Recovery Act (RCRA)
Q2) The oil spill that resulted in Congress creating the Oil Pollution Act was the:
A) Deepwater Horizon.
B) Gulf Oil Spill.
C) Kirsk.
D) Exxon Valdez
Q3) When filing a citizen suit,a private citizen or organization must:
A) be authorized by statute.
B) be authorized by statute and not profit from the enforcement action.
C) be an established environmental protection group.
D) have permission from the EPA to sue
Q4) The nickname for the Comprehensive Environmental Response Compensation and Liability Act (CERCLA)is _____.
Q5) ________ is the common law doctrine basis for modern environmental protection laws.
Page 20
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Chapter 19: Antitrust and Regulation of Competition
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Sample Questions
Q1) The law firm of Smith,Brown and Jones has just held a meeting in which they have decided that all fees charged by the partners will be $500 per hour with no exceptions.They also set nonnegotiable fees for such things as preparation of wills,real estate settlements and other types of standard types of cases.Smith,Brown and Jones:
A) are guilty of horizontal price fixing under the Sherman Act.
B) are guilty of vertical price fixing under the Sherman Act.
C) are guilty of price discrimination under the Robinson-Patman Act.
D) have broken no laws
Q2) The standards courts use to determine violations of the Sherman Act are the rule of reason standard and the ________ standard.
Q3) Which of these is an example of a tying agreement?
A) as part of purchasing a new computer, a buyer must also purchase a new monitor
B) when purchasing a new digital music player, a buyer is given the option of buying songs
C) when purchasing a used car, a buyer is offered a discount on new tires
D) when purchasing a couch, the buyer is given free throw pillows
Q4) ________ is an agreement between competitors to divide up markets or geographic regions.
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Chapter 20: Creditors Rights and Bankruptcy
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Sample Questions
Q1) Which of these debts may be discharged in a bankruptcy?
A) taxes
B) child support
C) a new auto purchased 90 days before filing
D) punitive damages
Q2) A Chapter 11 debtor may use bankruptcy as an excuse for not performing contractual obligations.
A)True
B)False
Q3) Unsecured creditors give loans based on ________ without collateral.
Q4) Fast Feet,a manufacturer of running shoes,gave Rick's Running,merchandise for their store on credit.Rick's is required to sign an agreement that describes the merchandise as collateral and the Rick's will pay Fast Feet weekly based on the sales of the shoes.Fast Feet files a statement of notice with the appropriate government agency.Based on these facts,what kind of creditor is Fast Feet and why?
Q5) Filing a statement of notice with a state government is one way to perfect a security interest.
A)True
B)False
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Chapter 21: Consumer Protection Law
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Sample Questions
Q1) The UCC permits disclaimers of warranties:
A) under no circumstances.
B) when the seller disclaims properly.
C) if the buyer was unaware of the warranties.
D) when allowed by the common law
Q2) The Truth in Lending Act applies to creditors who are _______ engaged in extending credit for goods and services.
Q3) If a buyer has not made a specific representation about a product,the buyer may still be protected by an express warranty.
A)True
B)False
Q4) Many express warranties are made through advertisements.
A)True
B)False
Q5) The Fair Debt Collection Practices Act applies to ________ collecting a debt for the creditor.
Q6) The implied warranty of merchantability applies to every sale from a _______ to a buyer.
Q7) Name and discuss the two categories of warranties.
Page 23
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Chapter 22: Criminal Law and Procedure in Business
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Sample Questions
Q1) If the criminal trial results in a verdict of not guilty,the government may retry case again because the government always gets one appeal.
A)True
B)False
Q2) The right to confront witnesses through cross examination is contained in the Sixth Amendment.
A)True
B)False
Q3) Although it may vary because of the nature of the case,generally,a delay of more than ________ is presumptively an unconstitutional violation of a defendant's right to a speedy trial.
A) four months
B) six months
C) eight months
D) ten months
Q4) A plea by a defendant where they do not admit guilt but agree to penalties imposed as if guilty is called a plea of no contest or _____.
Q5) What are the three purposes or aims of imposing punishment for criminal acts?
Q6) Being blameworthy in criminal law is called _____.
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Chapter 23: Personal Property, Real Property, and Land Use Law
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Sample Questions
Q1) The power of a municipality to pass zoning ordinances stems from:
A) the common law.
B) federal statutes passed by Congress.
C) statutes passed by the state legislature.
D) police powers
Q2) A leasehold estate that runs for fixed periods of time and automatically renews unless terminated by the tenant or landlord is called a ______.
Q3) The Takings Clause is found in the Constitution's:
A) First Amendment.
B) Fifth Amendment.
C) Eighth Amendment.
D) Fourteenth Amendment
Q4) Company A and Company B own adjacent pieces of land.If Company A digs a mine that starts on its own property but goes across the property line below ground and finds minerals below Company B's surface property,they may mine and use the minerals for their own use because they have not gone onto or disturbed Company B's property.
A)True
B)False
Q5) An exception to zoning ordinances is called a ______.
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Chapter 24: Intellectual Property
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Sample Questions
Q1) Trade secret protections are provided through:
A) state statutes and common law.
B) federal statutes.
C) the U.S. Constitution.
D) the Uniform Trade Secrets Act
Q2) Name the factors looked at by the court in the "Polaroid Test" used to determine whether trademark infringement has occurred.
Q3) How is it possible for two different parties to have simultaneous rights to use the same trademark?
Q4) Mike has written a novel.
A) the novel is copyrighted automatically after completion
B) the novel does not receive copyright protection unless it is registered with the United States Copyright Office
C) Mike may sue in court to enforce his rights whether the novel is registered or not D) the novel must be published before it can be eligible for copyright protections
Q5) On what grounds might the United States Patent and Trademark Office deny or reject an application for trademark Protection?
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26
Chapter 25: International Law and Global Commerce
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Sample Questions
Q1) What is the problem with the Madrid Protocol?
A) there are no specifics that require fundamental enforcement
B) few countries have signed the agreement
C) the European Union chose to create their own agreement instead of following Madrid Protocol's terms
D) the terms of the protocol are very limited in their application
Q2) The World International Property Organization created an arbitration center in Switzerland for the arbitration of each of the following except:
A) copyrights.
B) patents.
C) trademarks.
D) contracts
Q3) What does the Paris Convention address? What is the major enforcement problem with it?
Q4) The Paris Convention sets international standards for the patentability of inventions. A)True
B)False
Q5) What are the four major differences between the UCC and the UNCISG?
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