BUSFIN3500
BUSFIN3500 Final Exam Study Guide
Questions and Answers UPDATED 2025
In Design Strategies v. Davis, the court concluded that: -Correct Answer ✔Davis had
breached his fiduciary duty to Design Strategies by being disloyal to his employer.
You are employed by Atramento, a maker of fountain pen ink, as the purchasing
executive with the authority of approving the purchase of supplies. One of the suppliers
being considered by Atramento is a company owned by your spouse. This situation is
an example of: -Correct Answer ✔a conflict of interest.
The Uniform Commercial Code (UCC) is a statute, enacted in all states. The UCC
provides rules regulating many types of commercial transactions. Section 1-102 of the
UCC states the following: "(1) This Act shall be liberally construed and applied to
promote its underlying purposes and policies. (2) Underlying purposes and policies of
this Act are (a) to simplify, clarify and modernize the law governing commercial
transactions; (b) permit the continued expansion of commercial practices through
custom, usage and agreement of the parties, and (c) to make uniform the law among
the various jurisdictions." Which conception of law does Section 1-102 of the UCC
reflect? -Correct Answer ✔Realist conception.
Recall Otis Engineering Corp. v. Clark, in the Introduction of the B&K textbook. The
court's holding is: -Correct Answer ✔Part of the common law of Texas.
The U.S. Supreme Court's opinion in Abramski v U.S. is an example of: -Correct
Answer ✔Purposive legal reasoning.
Al Ladin, attorney for Spray Lawn, Inc., suspected that two of Spray Lawn's lower-
echelon employees were diverting the corporation's funds to their own use. Ladin
confronted the employees with his suspicions, and they both confessed. At Ladin's
insistence, the employees wrote a detailed account of their activities involving the
diversion of company funds. Their employment was then terminated. Subsequently, the
IRS conducted an audit of Spray Lawn, Inc. and issued a summons for the employees'
written statements in Ladin's possession. -Correct Answer ✔Ladin may lawfully refuse
to produce the statements on the basis of the attorney-client privilege.
The Federal District Court has exclusive jurisdiction over any case involving diversity of
citizenship. -Correct Answer ✔False
That each State in the United States has its court system, headed by a state supreme
court, and there also exists the court system of the United States of America, headed by
the U.S. Supreme Court, is an example of the concept of federalism. -Correct Answer
✔True
BUSFIN3500
,BUSFIN3500
An example of federal question jurisdiction would be one brought against an employer
for refusing to hire an applicant because of the applicant's race in violation of the United
States Civil Rights Act. -Correct Answer ✔True
The most likely result of AT&T Mobility LLC v. Conception would be an increase in class
action lawsuits. -Correct Answer ✔False
Fiduciary -Correct Answer ✔A person having a duty, created by his or her under-taking,
to act primarily for another's benefit.
Fiduciary Duty -Correct Answer ✔The duty which arises whenever one person is in
special relationship of trust to another, such as the duty an attorney owes to a client.
Conflict of Interest -Correct Answer ✔exists when your personal interest or duty conflicts
with a professional interest or duty. One example is a real estate, representing or seller,
having an ownership interest in a company wanting to buy the seller's property.
Two options w/ conflict of interest -Correct Answer ✔1) disqualification or (2) disclosure
and consent. Disqualification means the person having the conflict avoids the conflict by
disqualifying him or herself from the opportunity presented.
Due care -Correct Answer ✔people and companies must be careful not to injure others.
Good faith -Correct Answer ✔An intangible quality encompassing honesty, sincerity,
and the lack of intent to defraud or take advantage of another.
Code of ethics -Correct Answer ✔sets out an organization's ethical guidelines and best
practices to follow for honesty, integrity, and professionalism.
Compliance programs -Correct Answer ✔It is a system of processes, policies and
procedures, and controls that are developed to ensure compliance with all applicable
rules, regulations, contracts and policies governing the actions of the organization.
Ethics officers -Correct Answer ✔another level of protection against unethical business
practices. Considered experts in assessing conflicts of interests that arise within the
company and outside the company, instituting and monitoring compliance programs,
and providing educational programs for the various levels of company executives and
employees.
Law -Correct Answer ✔the system of rules which a particular country or community
recognizes as regulating the actions of its members and which it may enforce by the
imposition of penalties.
BUSFIN3500
, BUSFIN3500
Ethics -Correct Answer ✔the study of how moral decisions are justified.
Confidentiality -Correct Answer ✔keep information secret.
Jurisprudence -Correct Answer ✔the study of legal philosophy.
Natural Law -Correct Answer ✔Conception of law as a system of rules and principles for
the guidance of human conduct which, independently of enacted law or of the systems
peculiar to any one people, might be discovered by the rational intelligence of man, and
would be found to grow out of and conform to man's nature.
Positive Law -Correct Answer ✔Law actually or specifically enacted or adopted by
proper authority for the government of a society.
Historical Law -Correct Answer ✔those who define law only as the current command of
a sovereign may be criticized for ignoring the many rules that bound people in the past.
Because law is often older than state, some argue that the state is an incidental product
of more mature legal systems rather than the distinguishing characteristics of all law.
The historical school of jurisprudence defines law as the embodiment of a society's
customs. Asserts that custom is the chief manifestation of law, and that law evolves with
social development.
Sociological Law -Correct Answer ✔sociologists define law in present human conduct.
Thus, law is the sum of what the lawbooks permit and what human behavior provides.
Realist Law -Correct Answer ✔the realist conception focuses primarily on the social
influences affecting the judicial decision-making process. It views law as the product of
various social influences on official discretion.
Critical Law -Correct Answer ✔Its proponents contend that law is the product of political
and sociological judgments made by judges. Contend that judges make law in such a
way as to preserve the existing political and economic order.
Economic Law -Correct Answer ✔It contends that good law reflects good economics. It
sees law as an instrument by which efficient economic outcomes are achieved.
Feminist Jurisprudence -Correct Answer ✔Three Branches:
1) focuses on traditional legal doctrines of individual rights, exposes ways in which
women have not been treated equally with men, and seeks to correct the injustice.
2)contends that the law's focus on individual rights reflects a male perspective.
3) views women's roles as caregivers as a source of their oppression. It views the law
as a means of male dominance that perpetuates oppression.
Legislature -Correct Answer ✔The department, assembly, or body of government that
makes laws for a state or nation.
BUSFIN3500
BUSFIN3500 Final Exam Study Guide
Questions and Answers UPDATED 2025
In Design Strategies v. Davis, the court concluded that: -Correct Answer ✔Davis had
breached his fiduciary duty to Design Strategies by being disloyal to his employer.
You are employed by Atramento, a maker of fountain pen ink, as the purchasing
executive with the authority of approving the purchase of supplies. One of the suppliers
being considered by Atramento is a company owned by your spouse. This situation is
an example of: -Correct Answer ✔a conflict of interest.
The Uniform Commercial Code (UCC) is a statute, enacted in all states. The UCC
provides rules regulating many types of commercial transactions. Section 1-102 of the
UCC states the following: "(1) This Act shall be liberally construed and applied to
promote its underlying purposes and policies. (2) Underlying purposes and policies of
this Act are (a) to simplify, clarify and modernize the law governing commercial
transactions; (b) permit the continued expansion of commercial practices through
custom, usage and agreement of the parties, and (c) to make uniform the law among
the various jurisdictions." Which conception of law does Section 1-102 of the UCC
reflect? -Correct Answer ✔Realist conception.
Recall Otis Engineering Corp. v. Clark, in the Introduction of the B&K textbook. The
court's holding is: -Correct Answer ✔Part of the common law of Texas.
The U.S. Supreme Court's opinion in Abramski v U.S. is an example of: -Correct
Answer ✔Purposive legal reasoning.
Al Ladin, attorney for Spray Lawn, Inc., suspected that two of Spray Lawn's lower-
echelon employees were diverting the corporation's funds to their own use. Ladin
confronted the employees with his suspicions, and they both confessed. At Ladin's
insistence, the employees wrote a detailed account of their activities involving the
diversion of company funds. Their employment was then terminated. Subsequently, the
IRS conducted an audit of Spray Lawn, Inc. and issued a summons for the employees'
written statements in Ladin's possession. -Correct Answer ✔Ladin may lawfully refuse
to produce the statements on the basis of the attorney-client privilege.
The Federal District Court has exclusive jurisdiction over any case involving diversity of
citizenship. -Correct Answer ✔False
That each State in the United States has its court system, headed by a state supreme
court, and there also exists the court system of the United States of America, headed by
the U.S. Supreme Court, is an example of the concept of federalism. -Correct Answer
✔True
BUSFIN3500
,BUSFIN3500
An example of federal question jurisdiction would be one brought against an employer
for refusing to hire an applicant because of the applicant's race in violation of the United
States Civil Rights Act. -Correct Answer ✔True
The most likely result of AT&T Mobility LLC v. Conception would be an increase in class
action lawsuits. -Correct Answer ✔False
Fiduciary -Correct Answer ✔A person having a duty, created by his or her under-taking,
to act primarily for another's benefit.
Fiduciary Duty -Correct Answer ✔The duty which arises whenever one person is in
special relationship of trust to another, such as the duty an attorney owes to a client.
Conflict of Interest -Correct Answer ✔exists when your personal interest or duty conflicts
with a professional interest or duty. One example is a real estate, representing or seller,
having an ownership interest in a company wanting to buy the seller's property.
Two options w/ conflict of interest -Correct Answer ✔1) disqualification or (2) disclosure
and consent. Disqualification means the person having the conflict avoids the conflict by
disqualifying him or herself from the opportunity presented.
Due care -Correct Answer ✔people and companies must be careful not to injure others.
Good faith -Correct Answer ✔An intangible quality encompassing honesty, sincerity,
and the lack of intent to defraud or take advantage of another.
Code of ethics -Correct Answer ✔sets out an organization's ethical guidelines and best
practices to follow for honesty, integrity, and professionalism.
Compliance programs -Correct Answer ✔It is a system of processes, policies and
procedures, and controls that are developed to ensure compliance with all applicable
rules, regulations, contracts and policies governing the actions of the organization.
Ethics officers -Correct Answer ✔another level of protection against unethical business
practices. Considered experts in assessing conflicts of interests that arise within the
company and outside the company, instituting and monitoring compliance programs,
and providing educational programs for the various levels of company executives and
employees.
Law -Correct Answer ✔the system of rules which a particular country or community
recognizes as regulating the actions of its members and which it may enforce by the
imposition of penalties.
BUSFIN3500
, BUSFIN3500
Ethics -Correct Answer ✔the study of how moral decisions are justified.
Confidentiality -Correct Answer ✔keep information secret.
Jurisprudence -Correct Answer ✔the study of legal philosophy.
Natural Law -Correct Answer ✔Conception of law as a system of rules and principles for
the guidance of human conduct which, independently of enacted law or of the systems
peculiar to any one people, might be discovered by the rational intelligence of man, and
would be found to grow out of and conform to man's nature.
Positive Law -Correct Answer ✔Law actually or specifically enacted or adopted by
proper authority for the government of a society.
Historical Law -Correct Answer ✔those who define law only as the current command of
a sovereign may be criticized for ignoring the many rules that bound people in the past.
Because law is often older than state, some argue that the state is an incidental product
of more mature legal systems rather than the distinguishing characteristics of all law.
The historical school of jurisprudence defines law as the embodiment of a society's
customs. Asserts that custom is the chief manifestation of law, and that law evolves with
social development.
Sociological Law -Correct Answer ✔sociologists define law in present human conduct.
Thus, law is the sum of what the lawbooks permit and what human behavior provides.
Realist Law -Correct Answer ✔the realist conception focuses primarily on the social
influences affecting the judicial decision-making process. It views law as the product of
various social influences on official discretion.
Critical Law -Correct Answer ✔Its proponents contend that law is the product of political
and sociological judgments made by judges. Contend that judges make law in such a
way as to preserve the existing political and economic order.
Economic Law -Correct Answer ✔It contends that good law reflects good economics. It
sees law as an instrument by which efficient economic outcomes are achieved.
Feminist Jurisprudence -Correct Answer ✔Three Branches:
1) focuses on traditional legal doctrines of individual rights, exposes ways in which
women have not been treated equally with men, and seeks to correct the injustice.
2)contends that the law's focus on individual rights reflects a male perspective.
3) views women's roles as caregivers as a source of their oppression. It views the law
as a means of male dominance that perpetuates oppression.
Legislature -Correct Answer ✔The department, assembly, or body of government that
makes laws for a state or nation.
BUSFIN3500
