Course Introduction
Corporate Governance Study Guide
Questions
Corporate Governance explores the structures, processes, and mechanisms that direct and control corporations. The course examines the roles and responsibilities of key stakeholders, including boards of directors, management, shareholders, and other interested parties, in promoting accountability, fairness, and transparency. Students learn about legal and regulatory frameworks, ethical considerations, and best practices for mitigating agency problems and aligning corporate actions with stakeholder interests. Case studies and real-world examples are used to highlight governance challenges in various corporate environments, both domestically and internationally.
Recommended Textbook Business Law Today Text and Summarized Cases E Standard 9th Edition by Roger
LeRoy Miller
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Page 2
Chapter 1: The Legal Environment
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Sample Questions
Q1) Whether a law is constitutional depends on its source.
A)True
B)False
Answer: False
Q2) A state trial court has before it Eagle Manufacturing Co.v.Four Feathers Products Corp.,a case with no binding authority.The court can
A) not refuse to decide the Eagle case.
B) postpone deciding Eagle indefinitely.
C) postpone deciding Eagle until there is binding authority.
D) refuse to decide Eagle.
Answer: A
Q3) International law is the law of a foreign nation and varies from country to country.
A)True
B)False
Answer: False
Q4) The U.S.Constitution is the supreme law of the United States.
A)True
B)False Answer: True
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Chapter 2: Constitutional Law
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Q1) Congress enacts the Tight Money Act (TMA)of 2010 to ban "major business entities" from making political contributions that individuals can make.A court would likely hold the TMA to be
A) an unconstitutional restriction of speech.
B) constitutional under the First Amendment.
C) justified by the need to protect individual rights.
D) necessary to protect national interests.
Answer: A
Q2) A restriction on commercial speech that implements a substantial government interest may be valid.
A)True
B)False
Answer: True
Q3) The terms "procedural due process" and "equal protection" mean the same thing.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Courts and Alternative Dispute Resolution
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Q1) A judge instructs a jury as to the law that applies in a case.
A)True
B)False
Answer: True
Q2) The courts can decide whether the other branches of government have acted within the scope of their constitutional authority.
A)True
B)False
Answer: True
Q3) Unless otherwise agreed,the result of an online dispute resolution proceeding may not be appealed to a court.
A)True
B)False
Answer: False
Q4) The jurisdiction of a state court of appeal is substantially limited to hearing appeals.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Torts and Cyber Torts
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Q1) Louis-larger and stronger than Mica-threatens to hit Mica before hitting and injuring him.Mica files a suit against Louis for assault and battery.Mica will most likely recover for A) assault and battery.
B) assault but not battery.
C) battery but not assault.
D) neither assault nor battery.
Q2) Only a foreseeable intervening event can break the connection between a wrongful act and an injury to another.
A)True
B)False
Q3) A party cannot recover damages for severe emotional distress absent a showing of physical injury.
A)True
B)False
Q4) Defamation is one person's use of another's name without permission. A)True
B)False
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6
Chapter 5: Intellectual Property and Internet Law
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Q1) The process behind the production of "Fast Pace," a racecar video game,is protected by
A) copyright law.
B) patent law.
C) trademark law.
D) trade secrets law.
Q2) A trademark must be registered to support a trademark infringement action.
A)True
B)False
Q3) Copy Products,Inc.,uses,in its ads,a trademark that is similar,but not identical,to the famous,registered mark of Imitated Goods,Inc.Copy's unauthorized use of the mark constitutes trademark dilution provided
A) consumers are confused.
B) Copy and Imitated are competitors.
C) Copy's use is intentional.
D) Copy's use reduces the value of Imitated's mark.
Q4) In the United States,a patent is given to the first person to file for it.
A)True
B)False
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Chapter 6: Criminal Law
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Q1) Bob is arrested at his home,after the police search it and seize certain property to be used as evidence.A judge sets Bob's bail,as required by a state statute,and Bob is put on trial.The U.S.Constitution provides safeguards against all of the following except A) arrests without probable cause.
B) excessive bail.
C) trying someone for a criminal offense.
D) unreasonable searches and seizures.
Q2) Mariah takes off her ring and places it on her desk while she works.Without her knowledge or consent,her coworker Nita picks up the ring,puts it on,and walks away.Nita has likely committed
A) burglary.
B) forgery.
C) larceny.
D) no crime.
Q3) Divestiture of a business interest is a possible penalty under RICO.
A)True
B)False
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Chapter 7: Cyber Crime
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Q1) Impersonating a victim to make provocative comments online is vishing.
A)True
B)False
Q2) Travis sends Una a link to a purported e-birthday card that when clicked on downloads software to her computer to record her keystrokes and send the data to Travis.He uses the data to obtain her personal information and access her financial resources.This is
A) identity theft.
B) birthday bashing.
C) regifting.
D) Windows shopping.
Q3) Sierra digitally copies "Rampage" and other recent films without the authorization of the owners and transfers those copies freely to others via file-sharing Web sites.This is
A) piracy.
B) spamming.
C) phishing.
D) vishing.
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Chapter 8: Ethics and Business Decision Making
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Q1) In ethical terms,a cost-benefit analysis is an assessment of the negative and positive effects of alternative actions on individuals.
A)True
B)False
Q2) Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions include all of the following except
A) an individual's conscience.
B) business rules and procedures.
C) loopholes in the law or company policies.
D) promises to others.
Q3) According to utilitarianism,it does not matter how many people suffer a negative effect from an act.
A)True
B)False
Q4) According to utilitarianism,an action that affects the majority adversely is morally wrong.
A)True
B)False
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Chapter 9: Nature and Classification
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Q1) A promise is an assertion that something will or will not happen in the future.
A)True
B)False
Q2) Expert Pavers,Inc.,contracts with Fabricated Building Corporation to repave Fabricated's parking lot for which Fabricated agrees to pay.The requirements of this,and any other,contract do not include
A) consideration.
B) capacity.
C) legality.
D) practicality.
Q3) Bay City Construction,Inc.,a contractor,asks Cool Electric,a subcontractor,to provide certain services.Nothing is expressed about payment.Cool provides the services,but Bay City refuses to pay.In Cool's suit to recover,the chief issue is most likely to be whether these parties had
A) a formal contract.
B) an actual contract.
C) an implied-in-fact contract.
D) a voidable contract.
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11
Chapter 10: Agreement in Traditional and E-Contracts
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Q1) Myra owns a house,which she advertises for sale for $200,000.On May 1,Nicole offers Myra $180,000 for the house.On May 5,Myra delivers to Nicole a form that includes additional terms but does not state a price.At 9 a.m. on May 6, Nicole signs the form and gives it to Odell, her administrative assistant, with instructions to mail it. At 10 a.m., Myra calls to tell Nicole that the deal is off. The next day, Odell mails the signed form to Myra. When Myra refuses to sell the house, Nicole files a suit against her, alleging breach of contract. Myra claims that there was no contract. What are arguments supporting each party's position? What is the court likely to rule? Explain.
Q2) Nero and Oona negotiate a contract.Nero prints out a hard copy to review before both parties sign the electronic form of the contract.Neither party signs the hard copy.Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act),the signatures can
A) be denied effect because they are in electronic form.
B) be denied effect because Nero has not signed a hard copy.
C) be denied effect because Oona has not signed a hard copy.
D) not be denied effect because they are in electronic form.
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Page 12
Chapter 11: Consideration, capacity, and Legality
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Q1) Odell owns Payroll Company,a bookkeeping service losing market share to Quik Work,Inc.Odell pays Remy $5,000 to steal a list of Quik's clients,to whom Odell will aggressively market Payroll's services.This deal is
A) enforceable.
B) void.
C) voidable at the option of either party.
D) voidable at the option of the party having less bargaining power.
Q2) In most states,a release requires a signed writing.
A)True
B)False
Q3) A guardian can enter into legally binding contracts on behalf of a mentally incompetent person.
A)True
B)False
Q4) A promise to do something that one has a prior legal duty to do is not consideration. A)True
B)False
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Chapter 12: Defenses to Contract Enforceability
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Q1) To recover for fraud,a plaintiff must be under twenty-one years of age.
A)True
B)False
Q2) Don,a salesperson for Excel Autos,promises Fern that a certain car will give her a "smooth ride." Don offers a test drive,which Fern declines.She buys the car but soon realizes that its suspension is in poor condition.Fern
A) can rescind the contract on the ground of fraud.
B) can rescind the contract on the ground of misrepresentation.
C) can rescind the contract on the ground of mistake.
D) was not defrauded.
Q3) All mistakes of fact are material.
A)True
B)False
Q4) A contract entered into under duress is voidable.
A)True
B)False
Q5) Under the Statute of Frauds,all contracts induced by fraud must be in writing to be enforceable.
A)True
B)False
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Chapter 13: Third Party Rights and Discharge
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Q1) A delegation relieves the party making it of the obligation to perform.
A)True
B)False
Q2) Concurrent conditions occur only when the parties to a contract are required to perform their respective duties simultaneously.
A)True
B)False
Q3) Safe-T Guard Services enters into a contract to secure Taylor's Business Park from vandalism and theft between 6 p.m.and 6 a.m. nightly for six months. At the end of the term, if there has been no vandalism or theft in the Park, Safe-T's performance will have been
A) absolute.
B) complete.
C) conditional.
D) substantial.
Q4) The person to whom rights in a contract are assigned is the assignor.
A)True
B)False
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Page 15
Chapter 14: Breach and Remedies
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Q1) Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson's farm acreage for four corn-planting seasons.After Jaime prepares the land and plants the first crop,Karson says that their deal is off.Jaime can most likely recover
A) in quasi contract.
B) in reformation.
C) in restitution.
D) on the parties' existing contract.
Q2) Lava Excavators,Inc.,needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Lava can recover
A) $13,000.
B) $10,000.
C) $3,000.
D) $0.
Q3) Liquidated damages are damages that are certain in amount.
A)True
B)False
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Q1) Uri sells 100 cases of vitamins to Wanda,but before she takes physical possession,the cases are lost.Under the UCC,the parties' rights and obligations with respect to the loss depend on the concept of A) physical possession.
B) product liability.
C) risk of loss.
D) title.
Q2) Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car.This contract is subject to
A) Article 2 of UCC.
B) Article 2A of the UCC.
C) Article 11 of the CISG.
D) the common law only.
Q3) No oral contract is enforceable under the UCC.
A)True
B)False
Q4) A consumer lease is exempted from coverage under the UCC.
A)True
B)False
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Chapter 16: Performance Breach of Sales Lease Contracts
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Q1) Vehicle Leasing Agency (VLA)and Wander Trucking Company enter into a contract for a lease of eight cargo vans.VLA delivers eight vans,but they are not cargo-sized.Wander
A) cannot reject the entire shipment.
B) can reject the entire shipment.
C) must accept the entire shipment.
D) must reject the entire shipment.
Q2) A lessee's breach of a contract will usually give the lessor the right to cancel the contract.
A)True
B)False
Q3) Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation.Summit can enforce its right to payment
A) only after Valley has actually inspected the goods.
B) only after Valley has had an opportunity to inspect the goods.
C) only before Valley has inspected the goods.
D) whether or not Valley has had the chance to inspect the goods.
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18
Chapter 17: Warranties and Product Liability
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Q1) A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.
A)True
B)False
Q2) Musical,Inc.,sells fifty MP3 players to Noise Stores,Inc.To avoid liability for most implied warranties,in some states Musical could simply state in writing that the players are sold
A) as is.
B) by a merchant.
C) in perfect condition.
D) with no known defects.
Q3) A public policy underlying the imposition of strict product liability is that consumers should be protected against unsafe products.
A)True
B)False
Q4) An express warranty cannot be limited.
A)True
B)False
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Page 19
Chapter 18: Negotiable Instrument: Transferability Liability
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Q1) Nina wants to transfer a check to Opie.The check is not defective if it
A) has an obvious irregularity on its face.
B) has been previously honored.
C) is incomplete so that an element of negotiability is lacking.
D) is overdue.
Q2) An instrument payable to two persons jointly requires the indorsement of only one of the payees for negotiation.
A)True
B)False
Q3) Ray signs a promissory note for $10,000 in favor of State University (SU).The note does not specify the date of its payment.Ray defaults.In SU's suit to collect on the note,the court will most likely rule in favor of
A) Ray, because SU assumed the risk that the note would not be paid.
B) Ray, because the note is not payable at a definite time or on demand.
C) SU, because the note is an unconditional promise to pay the holder.
D) SU, because there is a uniform "default time" for repayment when a date is not specified.
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Chapter 19: Checks and Banking in the Digital Age
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Q1) Paris knowingly divulges to Media Exposure magazine information about Randy's e-money payments to City Bank.The payments were in transmission to City Bank when Paris,without the consent of Randy or City Bank,discovered and revealed them.This may be a violation of
A) the Electronic Communications Privacy Act.
B) the Federal Reserve Board's Regulation E.
C) the Right to Financial Privacy Act.
D) the Uniform Electronic Transactions Act.
Q2) A bank is obligated to pay an uncertified check presented less than six months from its date.
A)True
B)False
Q3) Currently,it is not clear which,if any,laws apply to the security of e-money payment information.
A)True
B)False
Q4) A stale check is one that has been outstanding for longer than one month.
A)True
B)False
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Chapter 20: Security Interests in Personal Property
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Q1) A security agreement must be filed in person to be valid and enforceable.
A)True
B)False
Q2) Everyday Loans,Inc.,takes possession of Ferbie's stock in Glade Electronics Corporation to perfect Everyday's security interest in the stock.This is
A) after-acquired property.
B) a pledge.
C) a purchase-money security interest.
D) proceeds.
Q3) To qualify as a commercially reasonable sale,a secured party's sale of collateral,after default and repossession,must be public.
A)True
B)False
Q4) A future advance against a line of credit must be of the same type as the original advance to be subject to the same collateral.
A)True
B)False
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Chapter 21: Creditors Rights and Bankruptcy
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Q1) If a surety pays the debt owed to a creditor,then the surety acquires any rights that the creditor had against the debtor.
A)True B)False
Q2) A homestead exemption allows a debtor to pay a fixed debt for an amount less than was actually owed.
A)True B)False
Q3) A creditor with a mechanic's lien on property can sell the property to satisfy the debt. A)True B)False
Q4) Bankruptcy law has one goal-to encourage the continued use of credit. A)True B)False
Q5) An attachment is a court-ordered seizure and taking into custody of property prior to the securing of a judgment for a past-due debt. A)True B)False
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Chapter 22: International Law in a Global Economy
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Q1) Refer to Fact Pattern 22-1.First State Bank
A) is responsible for making sure that the parties perform the contract.
B) will make payment once the transaction has been completed.
C) will make payment when Lapland presents the proper documents.
D) none of the above.
Q2) Optima Medico Corporation,a U.S.firm,signs a contract with Pharma Beneficial,Ltd.,a Canadian firm,to give Pharma the right to sell Optima's products in Canada.This is A) a distribution agreement.
B) a joint venture.
C) direct exporting.
D) licensing.
Q3) Hemisphere Financial Corporation,a U.S.firm,files a suit against Italy in a U.S.court.Italy claims foreign sovereign immunity.Under the Foreign Sovereign Immunities Act,this claim is determined by A) a neutral third-party court.
B) an international law court.
C) an Italian court.
D) the U.S. court in which the suit is filed.
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24
Chapter 23: Agency Relationships in Business
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Q1) Building subcontractors are not independent contractors.
A)True
B)False
Q2) A corporate officer is not an agent for the corporation.
A)True
B)False
Q3) An agency relationship may not occur by operation of law in a family.
A)True
B)False
Q4) An agency can terminate once its purpose is achieved.
A)True
B)False
Q5) In considering the scope of an agent's implied authority,the test is whether the agent reasonably believed that he or she had the authority.
A)True
B)False
Q6) Before a principal can ratify a contract,the agent must withdraw from the deal.
A)True
B)False
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Chapter 24: Employment,immigration,and Labor Law
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Q1) Hu,Ivan,and Juana apply to work for King Meatpacking Company.These individuals' identities and eligibility to work must be verified by A) the employer.
B) the individuals.
C) the individuals' countries of origin.
D) the U.S. Citizenship and Immigration Services.
Q2) There are no exceptions to the employment-at-will doctrine.
A)True
B)False
Q3) Service Employees International Union would like Tasty Cafés,Inc.,to require union membership of its job applicants as a condition to obtaining employment.This is A) illegal in all states.
B) illegal only in states that have right-to-work laws.
C) legal in all states.
D) legal only in states that have right-to-work laws.
Q4) No employee has a reasonable expectation of privacy in the workplace.
A)True
B)False
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Chapter 25: Employment Discrimination
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Q1) Lew,a member of a protected class,applies for a job with Mit-E Construction Company,but fails Mit-E's employment test and is not hired.Lew believes that the test has an unintentionally discriminatory effect.If so,this is
A) desperate-measure discrimination.
B) disparate-impact discrimination.
C) disparate-treatment discrimination.
D) not discrimination.
Q2) Riki files an employment,gender-based discrimination suit against Superior Corporation under Title VII,on a disparate-impact theory.To succeed,Riki must show that Superior hires fewer women than the percentage of A) qualified women in the local labor market.
B) qualified women in the United States.
C) women in Superior's state.
D) women who apply to Imperial for work.
Q3) An employer must modify its job-application process so that those with disabilities can compete for jobs with those who do not have disabilities.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) A franchise exists when the owner of a trademark licenses its use to another party to sell goods or services.
A)True
B)False
Q2) Carl sells Direct Marketing Enterprises,a sole proprietorship,to Erv.This is a transfer of
A) a license.
B) a trade name.
C) the formula to make a product.
D) the ownership of the business.
Q3) Most franchise agreements provide that termination must be "for cause."
A)True
B)False
Q4) If a party to a franchise contract fails to perform,he or she may be subject to a suit for breach of contract.
A)True
B)False
Q5) A sole proprietorship is a separate legal entity for tax purposes.
A)True
B)False
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Chapter 27: All Forms of Partnerships
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Q1) Cody is a partner in Delta Accounting Service.Cody can inspect
A) all of Delta's books and records.
B) Delta's books and records only as the firm's management permits.
C) Delta's books and records only for a reasonable purpose.
D) Delta's books and records relating to Cody's capital contribution only.
Q2) Lucy is a limited partner in Metro Contractors,a limited partnership,which cannot pay its debts.Lucy is personally liable for the debts
A) in proportion to the number of partners in the firm.
B) to no extent.
C) to the extent of her capital contribution.
D) to the full extent.
Q3) Grady and Hedy do business as Island Tours.For federal income tax purposes,Island Tours would be treated as
A) an aggregate of the individual partners.
B) a natural person.
C) an entity.
D) a non-existent party.
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Chapter 28: Limited Liability Companies Special Business
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Q1) Kristal is a member of Laboratory CSI Services,LLC,a limited liability company.Kristal can participate in the firm's management
A) only to the extent that she assumes liability for the firm's debts.
B) only to the extent of her investment in the firm.
C) to any extent.
D) to no extent.
Q2) Like a corporation,the ownership of a joint stock company is represented by shares of stock.
A)True
B)False
Q3) Elmo is the owner and manager of a business trust.Under the terms of a business trust,Elmo is required to
A) distribute the profits and manage the property.
B) distribute the profits only.
C) manage the property only.
D) neither distribute the profits nor manage the property.
Q4) A limited liability company is required to have an operating agreement.
A)True
B)False
30
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Chapter 29: Corporate Formation, merger, and Termination
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Q1) A business that holds itself out as being a corporation may not be able to deny corporate status,even if it makes no attempt to incorporate.
A)True
B)False
Q2) A firm named Scientific Discovery Corporation (SDC)makes an attempt to incorporate for a purpose other than making a profit.SDC is
A) a foreign corporation.
B) an alien corporation.
C) a nonprofit corporation.
D) not a corporation.
Q3) In a share exchange,neither corporation's directors need to approve the exchange.
A)True
B)False
Q4) A sale of all of a corporation's assets requires the approval of the state.
A)True
B)False
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Chapter 30: Corporate Directors, officers, Shareholders
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Q1) Some states permit a corporate board to have fewer than three directors.
A)True
B)False
Q2) A dividend may be paid from undistributed net corporate profits.
A)True
B)False
Q3) In all states,Sports Fitness Club Company and other corporations can pay dividends from
A) gross profits.
B) net profits.
C) retained earnings.
D) surplus.
Q4) Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.
A)True
B)False
Q5) Corporate shareholders are the ultimate authority in every corporation.
A)True
B)False
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Chapter 31: Investor Protection, insider Trading, Corp Gov
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Q1) Corporations' chief executive officers are directly accountable for the accuracy of financial statements filed with the Securities and Exchange Commission.
A)True
B)False
Q2) SEC Rule 10b-5 applies in relatively few cases involving the trading of securities.
A)True
B)False
Q3) Kitsch Niche Corporation is a noninvestment company that wants to issue $3 million of stock in a twelve-month period.Kitsch Niche,with less than $20 million in annual sales,qualifies as a small business issuer.Before Kitsch Niche sells the stock,it must provide investors with
A) an offering circular.
B) a notice of the issue.
C) a red herring prospectus.
D) a tombstone ad.
Q4) Generally,states have antifraud patterned after federal securities law.
A)True
B)False
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Chapter 32: Promoting Competition
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Q1) A suit is filed against Maxi Corporation,alleging that the firm committed the offense of monopolization.To determine whether Maxi has monopoly power requires looking at A) only Maxi's size.
B) only the relevant geographical market.
C) only the relevant product market.
D) the relevant geographical market and the relevant product market.
Q2) Monopoly power is an extreme amount of market power.
A)True
B)False
Q3) Tasty Eatin' Corporation merges with Hasty Burgers,Inc.This merger between firms that compete with each other in the same market is
A) a horizontal merger.
B) an interlocking directorate.
C) a tying arrangement.
D) a vertical merger.
Q4) A price-fixing agreement has the potential to lessen competition.
A)True
B)False
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Chapter 33: Consumer and Environmental Law
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Q1) Truckers Storage Depot,a private company,wants to build a warehouse on private land. For this action,an environmental impact statement is A) prohibited.
B) required.
C) unnecessary.
D) voluntary.
Q2) Little City Company operates a public water supply system.Little City must send to every household that it supplies with water an annual statement describing
A) Little City's financial situation and material facts that affect it.
B) other businesses in which Little City is involved and to what extent.
C) parties who might be held liable if pollution problems arise.
D) the source of the water, and any contaminants and health concerns.
Q3) Special Roast Coffee,Inc.,processes and sells a variety of coffee products.Special Roast's product packages must include
A) neither the contents' net quantity nor the product's identity.
B) the contents' net quantity and the product's identity.
C) the contents' net quantity only.
D) the product's identity only.
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Chapter 34: Liability of Accountants Other Professionals
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Q1) Under the Securities Exchange Act of 1934,an accountant may be liable for a misleading statement that affects the price of a security even if the accountant acted in good faith.
A)True
B)False
Q2) A public accounting firm is a firm engaged in the practice of accounting "in the public interest."
A)True
B)False
Q3) In most courts,accountants can be liable for negligence to any known users of the accountants' financial reports.
A)True
B)False
Q4) An accountant's working papers are the documents that are used and developed during an audit.
A)True
B)False
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Chapter 35: Personal Property and Bailments
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Q1) Property voluntarily placed somewhere by its owner and inadvertently forgotten is lost property.
A)True
B)False
Q2) Lauren owns a 1967 Ford Mustang,which Mike customizes and details to Lauren's specifications.The car earns several awards at regional vehicle customizing competition shows.The result of Mike's efforts is
A) accession.
B) acquisition.
C) conversion.
D) resolution.
Q3) Before undergoing surgery that could cause death,Donnelly,a guitarist,gives his of guitars to Cathy.The surgery is successful,and Donnelly does not die.The gift of the guitars is
A) not revoked because it was a gift causa mortis.
B) not revoked because it was a gift inter vivos.
C) revoked because it was a gift causa mortis.
D) not revoked because it was a gift largesse.
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Plant life is not considered to be real property.
A)True
B)False
Q2) A fixed-term tenancy is created when a lease does not specify its duration.
A)True
B)False
Q3) A tenant has a duty to maintain in a reasonably safe condition those areas under his or her control.
A)True
B)False
Q4) Orin owns Pilot's Landing Office Park.His ownership rights include the right to sell or give away the property without restriction,as well as the right to commit waste,if she chooses.Orin's ownership interest is
A) a fee simple absolute.
B) a leasehold estate.
C) a life estate.
D) the power of eminent domain.
Q5) Personal property may become real property by attaching it to real property.
A)True
B)False
38
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Chapter 37: Insurance, wills, and Trusts
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Q1) Dhani is the beneficiary of a life insurance policy on Elmo's life obtained from Famed Insurance Company.The insured under this policy is
A) Dhani.
B) Elmo.
C) Famed.
D) the agent or broker through whom the policy was obtained.
Q2) Insurance is classified according to the amount of the payment on a claim.
A)True
B)False
Q3) A person has an insurable interest in property if he or she would sustain a financial loss from damage to the property.
A)True
B)False
Q4) Holly obtains an insurance policy from Inviolable Insurance Corporation (IIC).IIC may cancel,or refuse to renew,the policy because of
A) Holly's appearance as a witness against IIC.
B) Holly's national origin.
C) Holly's race.
D) none of the choices.
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