24. The "Howey test" is used to determine whether a sale of something is an "investment contract" and therefore a security that is subject to federal securities laws. Which of the following is not an element of the Howey test?
A. Expect to make profits off the significant effort of others
B. Investment of money
C. Common enterprise
D. Oil, gas, and mineral interest
E. None of the above
32. Which antitrust law makes price discrimination illegal?
A. Section 1 of the Sherman Act
B. Section 2 of the Sherman Act
C. Section 2 of the Clayton Act
D. Section 3 of the Clayton Act
E. Section 7 of the Clayton Act
15. Bree, Gaby, Eddie, and Lynette form "Wisteria Lane LLC" which operates a home catering service and provides food, flower, photography, and other services for weddings. It is a manager-managed LLC. Bree and Gaby are named the managers. Which of the following is (are) true?
A. Bree and Gaby can bind the LLC to contracts with third parties
B. Eddie can bind the LLC to contracts with third parties
C. Lynette cannot bind the LLC to contracts with third parties
D. A and C
E. A, B, and C
30. An involuntary petition for bankruptcy may be filed under what chapter(s) of bankruptcy?
A. Chapter 7
B. Chapter 12
C. Chapter 13
D. B and C
E. A, B, and C
aC. Section 2 of the Clayton Act
bD. Oil, gas, and mineral interest
cD. A and C
dA. Chapter 7
5 Multiple Choice Questions
D. A and C
B. Yes, under partial discharge
B. The money becomes property of the bankruptcy estate
C. Price fixing
5 True/False Questions
33. General Motors Corporation files for Chapter 11 bankruptcy. Which of the following may be accomplished in a Chapter 11 bankruptcy?
A. Automatic stay of secured debt
B. Partial discharge of unsecured debt
C. Rejection of executory contracts and leases
D. All of the above.
E. A and C → D. All of the above.
36. (from the book) Which of the following rules permits "qualified institutional investors" to purchase unregistered securities without being subject to the one year holding period of most exempt offerings?
A. Rule 144
B. Rule 144A
C. Rule 506
D. Rule. 147
E. Rule 504 → C. Noerr doctrine
1. The 2005 Bankruptcy Act made it harder for individuals to qualify for Chapter 7 bankruptcy. Which of the following test(s) is (are) included in the 2005 Act to determine if an individual qualifies for Chapter 7 bankruptcy?
A. Rights Test
B. Means Test
C. Median Income Test
D. B and C
E. A, B and C → D. B and C
31. Lexus Motors and Infiniti Motors sell two high-end pricey automobiles in the United States market. In order to not compete with each other and to therefore keep their prices high for their automobiles, the presidents of the two companies agree that Lexus will sell cars in the states west of the Mississippi River and Infiniti will sell cars in states east of the Mississippi River, and neither will sell cars in the others geographical territory. Which of the following rule applies in examining whether this agreement violates antitrust law:
A. Rule of reason
B. Tying arrangement rule
C. Per se rule
D. Price discrimination rule
E. None of the above → C. Per se rule
22. In the United States, Starbucks Coffee Shops are owned by the Starbucks Corporation. However, Starbucks Corporation decides to open Starbucks Coffee Shops in China. To do so, Starbucks Corporation grants the Sino Corporation, a Chinese corporation, a franchise to select and grant local franchises to owners that Sino Corporation selects throughout China. What type of franchise arrangement exists between Starbucks Corporation and Sino Corporation?
A. Processing plant franchise
B. Distributorship franchise
C. Distributorship franchise
D. Area franchise
E. Local franchise → D. Area franchise