BUS 340 Ethical & Legal Issues in
Business
Finals Mock Exam Review
(Questions & Solutions)
2025
©2025
,> Topics Covered Include:
> • Corporate governance and fiduciary duties
> • Insider trading and securities regulation
> • Intellectual property rights and copyright issues
> • Ethical considerations in marketing, pricing, and product decisions
> • Whistleblowing, corporate social responsibility (CSR), and ethical
leadership
> • Conflicts of interest, stakeholder theory, and ethical decision making
> • Consumer protection laws and data privacy (GDPR, HIPAA)
> • The ethical implications of globalization and cross‑cultural business
practices
> • Legal frameworks such as Sarbanes‑Oxley, Dodd‑Frank, and antitrust
laws
> • Sustainable development and environmental ethical responsibilities
in business
---
Multiple Choice Questions (10 Questions)
Question 1:
A large corporation has been accused of misleading investors through
selective disclosure of financial information. Which legal principle is most
relevant for determining whether the firm violated securities law?
- A. Duty of care
- B. Full disclosure
- C. Insider trading
- D. Due process
ANS: B. Full disclosure
Rationale: Full disclosure is critical in securities law; companies must
reveal all material information to ensure investors can make informed
decisions. Failure to do so can lead to legal violations and penalties.
©2025
, ---
Question 2:
A company’s board of directors is considering compulsory whistleblower
protection policies after several employees reported questionable
accounting practices. Which of the following legal frameworks most
directly pertains to protecting whistleblowers?
- A. Foreign Corrupt Practices Act
- B. Sarbanes‑Oxley Act
- C. Dodd‑Frank Act
- D. Sherman Antitrust Act
ANS: C. Dodd‑Frank Act
Rationale: The Dodd‑Frank Act contains provisions that protect
whistleblowers within publicly traded companies, offering incentives and
protection against retaliation.
---
Question 3:
A multinational firm decides to launch an advertising campaign that may
include culturally sensitive content. To avoid potential legal issues and
reputational damage, which ethical principle should guide their decision?
- A. Utilitarianism
- B. Corporate social responsibility (CSR)
- C. Egoism
- D. Strict adherence to cost minimization
ANS: B. Corporate social responsibility (CSR)
Rationale: CSR emphasizes ethical behavior, social responsibility, and
respect for cultural diversity. Considering CSR helps ensure that
marketing practices do not lead to discrimination or cultural offense.
---
©2025
Business
Finals Mock Exam Review
(Questions & Solutions)
2025
©2025
,> Topics Covered Include:
> • Corporate governance and fiduciary duties
> • Insider trading and securities regulation
> • Intellectual property rights and copyright issues
> • Ethical considerations in marketing, pricing, and product decisions
> • Whistleblowing, corporate social responsibility (CSR), and ethical
leadership
> • Conflicts of interest, stakeholder theory, and ethical decision making
> • Consumer protection laws and data privacy (GDPR, HIPAA)
> • The ethical implications of globalization and cross‑cultural business
practices
> • Legal frameworks such as Sarbanes‑Oxley, Dodd‑Frank, and antitrust
laws
> • Sustainable development and environmental ethical responsibilities
in business
---
Multiple Choice Questions (10 Questions)
Question 1:
A large corporation has been accused of misleading investors through
selective disclosure of financial information. Which legal principle is most
relevant for determining whether the firm violated securities law?
- A. Duty of care
- B. Full disclosure
- C. Insider trading
- D. Due process
ANS: B. Full disclosure
Rationale: Full disclosure is critical in securities law; companies must
reveal all material information to ensure investors can make informed
decisions. Failure to do so can lead to legal violations and penalties.
©2025
, ---
Question 2:
A company’s board of directors is considering compulsory whistleblower
protection policies after several employees reported questionable
accounting practices. Which of the following legal frameworks most
directly pertains to protecting whistleblowers?
- A. Foreign Corrupt Practices Act
- B. Sarbanes‑Oxley Act
- C. Dodd‑Frank Act
- D. Sherman Antitrust Act
ANS: C. Dodd‑Frank Act
Rationale: The Dodd‑Frank Act contains provisions that protect
whistleblowers within publicly traded companies, offering incentives and
protection against retaliation.
---
Question 3:
A multinational firm decides to launch an advertising campaign that may
include culturally sensitive content. To avoid potential legal issues and
reputational damage, which ethical principle should guide their decision?
- A. Utilitarianism
- B. Corporate social responsibility (CSR)
- C. Egoism
- D. Strict adherence to cost minimization
ANS: B. Corporate social responsibility (CSR)
Rationale: CSR emphasizes ethical behavior, social responsibility, and
respect for cultural diversity. Considering CSR helps ensure that
marketing practices do not lead to discrimination or cultural offense.
---
©2025
