Question 1

Rikki is a director of STEM Inc. As a director, with respect to the corporation, Rikki is expected to use

Accepted Answer

A)   prudent business judgment in the conduct of corporate affairs.
B)   corporate funds for personal advantage.
C)   confidential information for personal advantage.
D)   her salary as an investment in corporate stocks or bonds .E) A) and B)
F) B) and C)

Question 2

The board of directors cannot delegate any of its functions to corporate officers.

Accepted Answer

A) True 
 B)False

Question 3

A decision to outsource the production of major components for a product likely is the responsibility of the

Accepted Answer

A)   board of directors.
B)   high-level managers.
C)   chief executive officer.
D)   shareholders.E) A) and C)
F) C) and D)

Question 4

Directors can use confidential corporate information for personal advantage.

Accepted Answer

A) True 
 B)False

Question 5

Riley is elected as a director to the board of Salty Snacks, Inc. He will most likely serve for a term of one

Accepted Answer

A)   decade.
B)   four-year period.
C)   lifetime.
D)   year.E) A) and B)
F) A) and C)

Question 6

Gil is an officer for HVAC Corporation. After reviewing proposals from several suppliers, Gil selects one. It turns out to be a bad choice on Gil's part, and HVAC's costs increase. Gil is most likely liable for

Accepted Answer

A)   breach of trust and confidence.
B)   breach of the business judgment rule.
C)   negligence or mismanagement of corporate funds.
D)   nothing because of the business judgment rule.E) None of the above
F) A) and B)

Question 7

The business judgment rule immunizes corporate management from liability for any action.

Accepted Answer

A) True 
 B)False

Question 8

Molly is a director and Ned is an officer of Online Education Inc. Liability for the torts of employees under their supervision may extend to

Accepted Answer

A)   Molly only.
B)   Ned only.
C)   Molly and Ned.
D)   neither Molly nor Ned.E) B) and C)
F) None of the above

Question 9

Ray is the chief corporate executive officer of Shipping Inc. For the accuracy of financial statements and reports that the firm files with the Securities and Exchange Commission, Ray is

Accepted Answer

A)   logistically responsible.
B)   corporately responsible.
C)   personally responsible.
D)   not responsible.E) None of the above
F) B) and D)

Question 10

Opal is an officer of Peaches n' Pears Inc. The board removes Opal in violation of an employment contract. Peaches may be liable for breach of

Accepted Answer

A)   contract.
B)   the business judgment rule.
C)   the duty of loyalty.
D)   the bylaws.E) B) and C)
F) B) and D)

Question 11

A director's right to access the corporation's books can be restricted by the corporate articles.

Accepted Answer

A) True 
 B)False

Question 12

Mike and Nora incorporate Onion Farm Inc. The number of directors who serve on Onion's board of directors is determined by its

Accepted Answer

A)   articles of incorporation.
B)   bylaws.
C)   board of directors.
D)   quorum.E) A) and B)
F) B) and C)

Exam 30: Management of a Corporation

Rikki is a director of STEM Inc. As a director, with respect to the corporation, Rikki is expected to use

Correct Answer
verified

The business judgment rule immunizes corporate management from liability for any action.

Correct Answer
verified

Gil is an officer for HVAC Corporation. After reviewing proposals from several suppliers, Gil selects one. It turns out to be a bad choice on Gil's part, and HVAC's costs increase. Gil is most likely liable for

Correct Answer
verified

Mike and Nora incorporate Onion Farm Inc. The number of directors who serve on Onion's board of directors is determined by its

Correct Answer
verified

The board of directors cannot delegate any of its functions to corporate officers.

Correct Answer
verified

Opal is an officer of Peaches n' Pears Inc. The board removes Opal in violation of an employment contract. Peaches may be liable for breach of

Correct Answer
verified

Ray is the chief corporate executive officer of Shipping Inc. For the accuracy of financial statements and reports that the firm files with the Securities and Exchange Commission, Ray is

Correct Answer
verified

Molly is a director and Ned is an officer of Online Education Inc. Liability for the torts of employees under their supervision may extend to

Correct Answer
verified

Riley is elected as a director to the board of Salty Snacks, Inc. He will most likely serve for a term of one

Correct Answer
verified

Directors can use confidential corporate information for personal advantage.

Correct Answer
verified

A decision to outsource the production of major components for a product likely is the responsibility of the

Correct Answer
verified

A director's right to access the corporation's books can be restricted by the corporate articles.

Correct Answer
verified

Exam 30: Management of a Corporation

Rikki is a director of STEM Inc. As a director, with respect to the corporation, Rikki is expected to use

Correct AnswerverifiedShow Answer

The business judgment rule immunizes corporate management from liability for any action.

Correct AnswerverifiedShow Answer

Gil is an officer for HVAC Corporation. After reviewing proposals from several suppliers, Gil selects one. It turns out to be a bad choice on Gil's part, and HVAC's costs increase. Gil is most likely liable for

Correct AnswerverifiedShow Answer

Mike and Nora incorporate Onion Farm Inc. The number of directors who serve on Onion's board of directors is determined by its

Correct AnswerverifiedShow Answer

The board of directors cannot delegate any of its functions to corporate officers.

Correct AnswerverifiedShow Answer

Opal is an officer of Peaches n' Pears Inc. The board removes Opal in violation of an employment contract. Peaches may be liable for breach of

Correct AnswerverifiedShow Answer

Ray is the chief corporate executive officer of Shipping Inc. For the accuracy of financial statements and reports that the firm files with the Securities and Exchange Commission, Ray is

Correct AnswerverifiedShow Answer

Molly is a director and Ned is an officer of Online Education Inc. Liability for the torts of employees under their supervision may extend to

Correct AnswerverifiedShow Answer

Riley is elected as a director to the board of Salty Snacks, Inc. He will most likely serve for a term of one

Correct AnswerverifiedShow Answer

Directors can use confidential corporate information for personal advantage.

Correct AnswerverifiedShow Answer

A decision to outsource the production of major components for a product likely is the responsibility of the

Correct AnswerverifiedShow Answer

A director's right to access the corporation's books can be restricted by the corporate articles.

Correct AnswerverifiedShow Answer

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