BUSINESS AND LAW EXAM LEVEL 3 LATEST 2026
VERSION WITH 100 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||BRAND NEW VERSION!!
1. Which of the following best describes the principle of fiduciary duty?
A. A duty to compete fairly with business rivals
B. A duty to act in the best interest of another party
C. A duty to avoid taxes legally
D. A duty to report all financial transactions to the government
B. A duty to act in the best interest of another party. Fiduciary duty
requires a person to act loyally and in the best interests of another, such
as a trustee to a beneficiary.
2. In contract law, what is required for an agreement to be considered legally
binding?
A. Only verbal consent
B. Offer, acceptance, consideration, and intention to create legal relations
C. Witnesses present at the signing
D. Registration with a government authority
B. Offer, acceptance, consideration, and intention to create legal relations.
These four elements are essential for a contract to be enforceable.
3. Which business structure provides limited liability protection but allows
profits to be taxed only once at the owner level?
A. Sole proprietorship
B. Corporation
C. Limited liability company (LLC)
D. Partnership
C. Limited liability company (LLC). An LLC shields personal assets from
business liabilities and allows pass-through taxation.
,4. Antitrust laws primarily aim to:
A. Protect consumers from unsafe products
B. Prevent monopolies and promote competition
C. Regulate labor relations
D. Control international trade
B. Prevent monopolies and promote competition. Antitrust laws prevent
anti-competitive practices and ensure fair market competition.
5. Which of the following constitutes a material breach of contract?
A. Minor delay in delivery
B. Complete failure to perform a significant contractual obligation
C. Typographical errors in a contract
D. Negotiating with a competitor
B. Complete failure to perform a significant contractual obligation. A
material breach goes to the heart of the contract, allowing the non-
breaching party to terminate or seek damages.
6. Intellectual property rights protect:
A. Tangible assets only
B. Physical labor of employees
C. Creations of the mind, such as inventions and trademarks
D. Real estate investments
C. Creations of the mind, such as inventions and trademarks. IP law
safeguards ideas, inventions, and brand identity.
7. Which of the following is an example of a unilateral contract?
A. A contract where both parties exchange promises
B. A contract that requires only one party to perform upon a condition
C. A contract that is void due to illegality
D. A contract under seal
B. A contract that requires only one party to perform upon a condition.
Unilateral contracts are formed when one party promises something in
return for an act by another.
, 8. Which type of bankruptcy allows a business to reorganize while continuing
operations?
A. Chapter 7
B. Chapter 11
C. Chapter 13
D. Chapter 9
B. Chapter 11. Chapter 11 bankruptcy enables businesses to restructure
debts while staying operational.
9. A non-compete clause in an employment contract is enforceable if it:
A. Is reasonable in scope, duration, and geography
B. Prohibits competition forever
C. Applies globally without limitation
D. Applies even after an employee is terminated for cause
A. Is reasonable in scope, duration, and geography. Courts generally
enforce non-compete clauses only if they protect legitimate business
interests without being overly restrictive.
10.The primary role of the Securities and Exchange Commission (SEC) is to:
A. Regulate banking practices
B. Protect investors and maintain fair, orderly securities markets
C. Collect taxes on corporate profits
D. Enforce labor laws
B. Protect investors and maintain fair, orderly securities markets. The SEC
oversees securities trading and ensures transparency and fairness.
11.What is the main difference between common law and civil law systems?
A. Common law is written; civil law is based on precedent
B. Common law is based on precedent; civil law relies on codified statutes
C. Civil law only exists in the United States
D. Common law does not use courts
B. Common law is based on precedent; civil law relies on codified statutes.
Common law evolves through judicial decisions, whereas civil law is
strictly statutory.
VERSION WITH 100 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||BRAND NEW VERSION!!
1. Which of the following best describes the principle of fiduciary duty?
A. A duty to compete fairly with business rivals
B. A duty to act in the best interest of another party
C. A duty to avoid taxes legally
D. A duty to report all financial transactions to the government
B. A duty to act in the best interest of another party. Fiduciary duty
requires a person to act loyally and in the best interests of another, such
as a trustee to a beneficiary.
2. In contract law, what is required for an agreement to be considered legally
binding?
A. Only verbal consent
B. Offer, acceptance, consideration, and intention to create legal relations
C. Witnesses present at the signing
D. Registration with a government authority
B. Offer, acceptance, consideration, and intention to create legal relations.
These four elements are essential for a contract to be enforceable.
3. Which business structure provides limited liability protection but allows
profits to be taxed only once at the owner level?
A. Sole proprietorship
B. Corporation
C. Limited liability company (LLC)
D. Partnership
C. Limited liability company (LLC). An LLC shields personal assets from
business liabilities and allows pass-through taxation.
,4. Antitrust laws primarily aim to:
A. Protect consumers from unsafe products
B. Prevent monopolies and promote competition
C. Regulate labor relations
D. Control international trade
B. Prevent monopolies and promote competition. Antitrust laws prevent
anti-competitive practices and ensure fair market competition.
5. Which of the following constitutes a material breach of contract?
A. Minor delay in delivery
B. Complete failure to perform a significant contractual obligation
C. Typographical errors in a contract
D. Negotiating with a competitor
B. Complete failure to perform a significant contractual obligation. A
material breach goes to the heart of the contract, allowing the non-
breaching party to terminate or seek damages.
6. Intellectual property rights protect:
A. Tangible assets only
B. Physical labor of employees
C. Creations of the mind, such as inventions and trademarks
D. Real estate investments
C. Creations of the mind, such as inventions and trademarks. IP law
safeguards ideas, inventions, and brand identity.
7. Which of the following is an example of a unilateral contract?
A. A contract where both parties exchange promises
B. A contract that requires only one party to perform upon a condition
C. A contract that is void due to illegality
D. A contract under seal
B. A contract that requires only one party to perform upon a condition.
Unilateral contracts are formed when one party promises something in
return for an act by another.
, 8. Which type of bankruptcy allows a business to reorganize while continuing
operations?
A. Chapter 7
B. Chapter 11
C. Chapter 13
D. Chapter 9
B. Chapter 11. Chapter 11 bankruptcy enables businesses to restructure
debts while staying operational.
9. A non-compete clause in an employment contract is enforceable if it:
A. Is reasonable in scope, duration, and geography
B. Prohibits competition forever
C. Applies globally without limitation
D. Applies even after an employee is terminated for cause
A. Is reasonable in scope, duration, and geography. Courts generally
enforce non-compete clauses only if they protect legitimate business
interests without being overly restrictive.
10.The primary role of the Securities and Exchange Commission (SEC) is to:
A. Regulate banking practices
B. Protect investors and maintain fair, orderly securities markets
C. Collect taxes on corporate profits
D. Enforce labor laws
B. Protect investors and maintain fair, orderly securities markets. The SEC
oversees securities trading and ensures transparency and fairness.
11.What is the main difference between common law and civil law systems?
A. Common law is written; civil law is based on precedent
B. Common law is based on precedent; civil law relies on codified statutes
C. Civil law only exists in the United States
D. Common law does not use courts
B. Common law is based on precedent; civil law relies on codified statutes.
Common law evolves through judicial decisions, whereas civil law is
strictly statutory.
