Question: Which of the following statements is CORRECT?
Answer Options:
a. The NPV method assumes that cash flows will be reinvested at the WACC, while the IRR method assumes reinvestment at the IRR.
b. The NPV method assumes that cash flows will be reinvested at the risk-free rate, while the IRR method assumes reinvestment at the WACC.
c. The NPV method assumes that cash flows will be reinvested at the WACC, while the IRR method assumes reinvestment at the risk-free rate.
d. The NPV method does not consider all relevant cash flows, particularly cash flows beyond the payback period.
e. The IRR method does not consider all relevant cash flows, particularly cash flows beyond the payback period.
Answer: a
Question: If a defendant is found not guilty of criminal battery, which of the following is true?
Answer Options:
The victim can sue the defendant for the tort of civil battery.
The victim cannot sue the defendant for the tort of civil battery because it would amount to double jeopardy.
In a civil suit for the tort of civil battery, the standard of proof is beyond a reasonable doubt.
In the criminal trial, both criminal battery and civil battery can be decided in the same trial.
Answer: The victim can sue the defendant for the tort of civil battery.
Question: A turkey farm allows a restaurant called Wings and a Prayer Restaurant to choose turkeys from its farm two weeks prior to Thanksgiving. This arrangement can be described as which of the following?
Answer Options:
A license.
A life estate.
An easement in gross or profit in gross.
An easement appurtenant.
Answer: An easement in gross or profit in gross.
Question: Goldie Locks and Gene Poole, both attorneys, settle a negligence lawsuit filed by Goldie’s client against Gene’s client. Goldie’s client was a $1,000,000 and the settlement amount was $90,000. Although Gene’s client initially agreed to settle the case and informed Gene of his desire to settle, he changes his mind because he does not believe he was negligent. Which of the following is true?
Answer Options:
The settlement is not enforceable because a settlement is not a contract.
Gene’s client cannot change his mind because the settlement of a court case is a binding contract.
The settlement is not enforceable due to a lack of consideration.
Gene’s attorney must disregard the settlement and litigate the case because his client changed his mind.
Answer: Gene’s client cannot change his mind because the settlement of a court case is a binding contract.
Question: One of your friends asks you to explain the difference between a license and an easement in gross. Your response is…
Answer Options:
A license is the right to enter property for a particular purpose – an easement in gross is the right to enter property to extract something from the property.
A license is the right to enter property for a particular purpose – an easement in gross is the right to enter property in order to have access to a road.
An easement in gross is the right to enter property for a particular purpose – a license is the right to enter property to extract something from the property.
There is no difference.
Answer: A license is the right to enter property for a particular purpose – an easement in gross is the right to enter property in order to have access to a road.
Question: The Spiderman Supreme Court case involved which of the following?
Answer Options:
Patent law
Trade secrets
Copyright law
Trademarks
Answer: Copyright law
Question: Victor E. Lapp, a Ohio citizen sues Hughes Car, a Michigan resident in a federal court located in Michigan for a tort that occurred in Michigan. The amount in controversy is $150,000. The federal court refuses to hear the case. The basis for the court’s refusal to hear the case is which of the following?
Answer Options:
The court will refuse to hear the case because the plaintiff lacks standing.
The court will refuse to hear the case because the venue is improper.
The court is wrong not to hear the case because it has diversity jurisdiction.
The court will refuse to hear the case because not all the requirements of diversity jurisdiction are met.
Answer: The court will refuse to hear the case because not all the requirements of diversity jurisdiction are met.
Question: Which of the following statements is CORRECT?
Answer Options:
a. The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects.
b. For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods.
c. Multiple IRRs can exist, but not multiple MIRRs. This is one reason some people favor the MIRR over the regular IRR.
d. If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years.
e. The percentage difference between the MIRR and the IRR is equal to the project’s WACC.
Answer: c
Question: Miranda asks Molly to sign for a package on her behalf and leave it on Molly’s front step. When Miranda signs for the package, there’s hurricane tape winds and Miranda fears that if she leaves the package on Molly’s front step, it will fly away. So, instead, Miranda takes the package into her house and leaves Molly a note informing her of that. Which of the following is true?
Miranda honored her duty of bailor by taking the package into her house.
Miranda should have refused to sign for the package.
Miranda’s authority was limited to leaving the package on Molly’s front step.
Under the circumstances, Miranda exercised implied authority so that the package would be delivered undamaged to Molly.
Answer: Under the circumstances, Miranda exercised implied authority so that the package would be delivered undamaged to Molly.
Question: Which of the following is true with respect to RICO?
Answer Options:
It is a state criminal statute.
It is a federal criminal statute that imposes criminal penalties and does not specifically allow victims to seek damages against the wrongdoers.
It is a federal regulation.
It is a criminal statute that imposes criminal penalties and allows victims to seek damages against the wrongdoer.
Answer: It is a criminal statute that imposes criminal penalties and allows victims to seek damages against the wrongdoer.
Question: Sam, driving under the influence, causes a car accident that results in the death of Tanya. Sam is arrested and charged with a crime punishable by imprisonment for more than a year. This crime is
Answer Options:
a tort.
a civil wrong.
a misdemeanor.
a felony.
Answer: a felony.
Question: Match the amounts that count as a “1 ounce-equivalent” in the Protein Foods Group. (Note: One of the choices will be used twice.)
Answer Options:
[A] 1 egg
[B] 1/2 almonds
[C] 1/2 walnut halves
[D] 1 tbsp peanut butter or almond butter
[E] 1/4 cup cooked beans or tofu
[F] 1 tbsp hummus
Correct Answer
1 egg
1/2 almonds
1/2 walnut halves
Answer:
Question: Sky King an airport developer discusses building a new airport with Bill House. Sky tells Bill that if he creates complete architectural drawings, Sky will purchase those drawings. Which of the following is true?
Sky can rescind his offer to Bill at anytime prior to completion of the plans.
The parties have entered into a binding bilateral agreement.
Depending on how much of the drawings Bill has completed, Sky may not be able to rescind the offer.
Regardless of how much of the plans Bill has completed, there is a binding contract.
Answer: The parties have entered into a binding bilateral agreement.
Question: What is a true statement regarding the sale of a business?
The buyer obtains all assets listed in the purchase and sale agreement.
Sale does not include intangible assets unless specifically stated.
The sale is not valid until all debts of the business are settled.
Liabilities are automatically transferred to the buyer.
Answer: The buyer obtains all assets listed in the purchase and sale agreement.
Question: Which of the following best describes the difference between a warranty deed and a special warranty deed?
Answer Options:
A warranty deed provides the buyer/grantee more protection.
A special warranty deed provides the buyer/grantee more protection.
For a warranty deed to be enforceable, the buyer/grantee must purchase title insurance.
There is no difference between the two deeds.
Answer: A warranty deed provides the buyer/grantee more protection.
Question: Low on gas, Asher drives to a convenience store and fills his tank with fuel. After filling his tank, he decides he does not want the gas because it is too expensive. Which of the following is true?
Asher is entitled to rescind the money back because he never communicated his acceptance to the convenience store.
Asher must pay for the gas under quasi contract principles.
Asher must pay for the gas because he entered an implied contract with the convenience store.
Asher is entitled to receive his money back because he rescinded his acceptance of the contract.
Answer: Asher must pay for the gas under quasi contract principles.
Question: Bond X has an 8% annual coupon, Bond Y has a 10% annual coupon, and Bond Z has a 12% annual coupon. Each of the bonds is noncallable, has a maturity of 10 years, and has a yield to maturity of 10%. Which of the following statements is CORRECT?
a. If the bonds’ market interest rate remains at 10%, Bond Z’s price will be lower one year from now than it is today.
b. Bond X has the greatest reinvestment risk.
c. If market interest rates decline, the prices of all three bonds will increase, but Z’s price will have the largest percentage increase.
d. If market interest rates remain at 10%, Bond Z’s price will be 10% higher one year from today.
e. If market interest rates increase, Bond X’s price will increase, Bond Z’s price will decline, and Bond Y’s price will remain the same.
Answer Options:
a. True
b. False
c. False
d. False
e. False
Answer: a. True
Question: Jack Welch, a former CEO, said which of the following with respect to corporate responsibility?
Answer Options:
A corporation’s customers are the most important stakeholders of a corporation.
A corporation making money is always secondary to supporting worthy social causes.
Although a corporation should be a good citizen, it must first make money.
The only responsibility of a corporation is to make money.
Answer: Although a corporation should be a good citizen, it must first make money.